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How can I correct the error where my school expenses were placed on the wrong line by Free Tax USA for my 2021 taxes? The IRS is requesting more information (Schedule EIC), and I was told I couldn't send an amendment since it's for the 2021 tax year. What to do?
How can I correct the error where my school expenses were placed on the wrong line by Free Tax USA for my 2021 taxes? The IRS is requesting more information (Schedule EIC), and I was told I couldn't send an amendment since it's for the 2021 tax year. What to do?
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Robert James, 20+ years of experience in IRS mattersAnswered on September 29,2023
Education expenses are not reported directly on the Form 1040; they go on Form 8863 which is used to calculate education credits. Was there a Form 8863 in the tax return?
The non-refundable education credits flows onto Schedule 3, which flows onto Form 1040 Line 20. Any refundable AOC flows onto Form 1040 Line 29, but it's never the same amount as the education expenses.
You only need the Schedule EIC if you are claiming EIC for your qualifying children in addition to yourself - a single person's EIC is calculated using worksheets in the Form 1040 instructions.
This doesn't get included with the tax return sent to IRS, but I believe you can access it from the Credit menu in the FreetaxUSA software.
Its extremely unlikely that the school expenses were entered on Form 1040 Line 27a if you used software; I think it's more likely that the amounts are similar because of coincidence.
So the question you need to figure out is whether you qualified for EIC in 2021.
Was there any earned income from work in 2021? If not, maybe you worked in 2019 and FreetaxUSA used the lookback provision for EIC, which was allowed for a couple of years under covid tax relief.
If that's the case the 2019 Earned income should be on Form 1040 Line 27c.
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