Millions of Americans are still waiting for their 2020 tax returns to be processed. These individuals may need to take additional steps to prevent their 2021 return from being rejected, especially if they plan to e-file. Optima Tax Relief reviews how to prevent rejection.
Typically, when a taxpayer e-files using a tax preparation software, they validate the return with the prior year’s AGI. If the taxpayer’s 2020 return is still being processed, they should enter $0 for their 2020 AGI when e-filing their 2021 return. This step is recommended by National Taxpayer Advocate Erin Collins. This extra step only applies to those who are e-filing.
Additionally, those who do not usually file but plan to in order to claim an advance child tax credit or the Economic Impact Payment should enter $1 as their 2020 AGI.
Failing to make these changes can result in the IRS rejecting an electronic tax return.
Taxpayers who received a CP80 notice, which notifies of a missing tax return, should also enter $0 as their 2020 AGI when e-filing. If a taxpayer follows these steps and the return is rejected, it could mean that the IRS has processed their 2020 return in the time after sending out the CP80 notice. At this point, the taxpayer can refile using their actual 2020 AGI.
Taxpayers can check the status of their 2020 returns in their Online Account on the IRS website.