Tax refund delays possible for filers who used higher education-credit forms

March 16, 2013 5:06:43 PM PDT
A problem with some tax software that may impact your ability to get the refund you deserve.

If you have already filed for your refund you probably can use that money as soon as possible, but hundreds of thousands of early filers are learning a glitch is putting that money on hold.

Like a lot of tax payers, Wesley Henderson pays some years and gets a refund other times.

"It depends on how much I make a year," Henderson said.

While Henderson has yet to file for his expected refund, more than 6 million Americans have already done so. Now many of them are finding out they will not get their money anytime soon.

"What's happening now is possibly up to 600,000 tax returns that had this form in it that went to the IRS are now bouncing back," Houston CPA Bob Martin said.

Martin says the problem form is 8863. It is the one used for higher education credits. Late changes in the tax code are responsible for the refund delay.

"Because of late legislation, this year that affected 2012, there were some programming problems and apparently not all the software vendors caught them in time," Martin said.

H&R Block is just one of the companies whose clients are seeing delays.

In a statement H&R Block told us:

"We are communicating directly with our impacted clients to assure them that we are doing everything we can to expedite their returns. The IRS has informed us and other impacted providers that they are currently processing these returns."

But the IRS review could delay refunds for several more weeks.

"The very people who need these credits are the people in lower income brackets who get these credits and if the refund is delayed it could end up costing them credit card interest and they may end up borrowing from family or friends," Martin said.

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