What Happens If I Claimed the Hope Credit & Should Not Have?
Any time you discover an error on your income tax return, unless it concerns a mathematical mistake, you should file an amended return. Internal Revenue Code invokes time limits on filing correcting returns. You have three years from the date you filed the erroneous return to correct it, or two years from the date you paid the taxes associated with the incorrect return -- whichever is later.
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Taking the Hope Credit in Error
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If you took the Hope Credit in error because you did not meet all three requirements associated with the credit, you must file an amended income tax return to correct the mistake. The requirements include paying qualified tuition or related expenses during the first two years of post-secondary education and paying tuition and related expenses for an eligible student. The eligible student must be you, your spouse or your dependent.
Hope Credit Revisions
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If you feel you took the Hope Credit in error when filing your 2009 or 2010 federal income tax return, make sure changes to the Hope Credit made via the American Opportunity Tax Credit do not have a bearing on your decision to file an amended return. The changes include raising the credit allowed to $2,500, claiming the credit for the first four years of post-secondary education instead of two, raising the adjusted gross income limitations to $90,000 or $180,000 for a person filing as married filing jointly. Changes also entailed adding course materials to qualified expenses and increasing the portion of the Hope Credit considered refundable.
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Use Form 1040X
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If you reviewed the Hope Credit updates and still feel you must file an amended return, use Form 1040X: Amended U.S. Individual Return. File the corrected version, along with the corrected version of Form 8863: Education Credits. Be sure you check the box at the top of Form 1040X for the tax year you are correcting. If you owe additional taxes because of the correction, enclose your check or money order with your return. If you require additional time to retire the debt, use Form 9465: Installment Agreement Request.
Filing an Amended Return
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Mail Form 1040X because there is no method in place that allows electronic filing for an amended return. If you need to check the status of an amended return, call the IRS, as this information is not available online or through the IRS automated telephone service.
State Corrections
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If your state imposes an income tax, you may have to correct your state return. Because requirements for correction vary by state, contact your state's income tax authority to attain information relevant to filing an amended state income tax return.
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References
- American Opportunity, Hope and Lifetime Learning Education Credits
- IRS: Publication 970 (2010), Tax Benefits for Education
- IRS: Topic 308 -- Amended Returns
- IRS: Can You Send and Amended Return Electronically?
- IRS: How Can I Check the Status of my Amended Return?
- IRS: Form 9465, Installment Agreement Request
Resources
- Photo Credit tax forms image by Chad McDermott from Fotolia.com
