QuickAlerts - All Modernized e-File (MeF) Business and Individual (BMF & IMF) Participants - Transmitters, Software Developers, States and Practitioners

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QuickAlerts for Tax Professionals February 20, 2013

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Subject: E-filing Form 8863, Education Credits


We have observed instances in which the Form 8863, Education Credits, attached to the Form 1040 and 1040A is not completed correctly. These instances are causing downstream processing delays. We have experienced the following two conditions: (1) The Form 8863 Part III Line 25 Yes or No checkboxes are not completed when required and (2) The Form 8863 Part III Line 26 Yes or No checkboxes are not completed when required.

The Form 8863 instructions direct the taxpayer to:

If you checked “Yes” on Line 24 go to line 25.

 

Line 25 

Check “Yes” if the student completed the first 4 years of postsecondary education before 2012. Otherwise, check “No.” If you checked “No,” go to line 26. If you checked “Yes,” the student is not eligible for the American Opportunity Credit; skip lines 26 through 30 and go to line 31.

 

Line 26 

Check “Yes” if the student was convicted, before the end of 2012, of a federal or state felony for possession or distribution of a controlled substance. If you checked “No,” complete either lines 27 through 30 or line 31 for this student. If you checked “Yes,” the student is not eligible for the American Opportunity Credit; skip lines.

 

We are working to implement Business Rules to reject these incorrectly completed returns and have not determined the date for these new Business Rules.

In the interim, we request that software packages be modified to require completion of the correct boxes on lines 25 and 26 when appropriate. Additionally the appropriate checkboxes should be completed for lines 23 and 24. Also please communicate this information to the practitioner community to avoid delays in processing returns.

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