IRS Unveils Electronic Filing of Amended Tax Returns

Form 1040-X fixes errors on your original return

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The Internal Revenue Service (IRS) is finally able to accept e-filed amended returns in 2020, more than 30 years after the advent of the first electronic federal tax returns. Form 1040-X, which is used by taxpayers to replace original returns because of errors regarding status, income, or deductions, can be filed electronically as of August 2020. The IRS made the announcement in a news release on its website on May 28, 2020.

Taxpayers only have the option to electronically amend certain 2019 returns (Form 1040 and 1040-SR) as of October 2020, however.

The History of Electronic Filing

E-filing of standard returns was first made possible in 1986, when the internet was still in its infancy. IRS staff had to physically turn on a modem to accept returns at that time, and only about 25,000 returns were e-filed by five tax professionals that first year. 

But e-filing has become the norm for most taxpayers in the ensuing decades, and a free electronic filing option was introduced for taxpayers who earned under a certain income in 2013. The Free File Alliance, a partnership between the agency and some established and well-known tax software providers, provides free e-filing and tax return preparation for taxpayers with 2020 gross adjusted incomes of less than $72,000.

The income threshold for Free File eligibility can be adjusted annually to keep pace for inflation. It might be higher in the 2021 tax year.

Although e-filing standard returns is routine for about 90% of taxpayers these days, applying that capability to the amended return required overcoming some “unique challenges,” the IRS said. The electronic return should nonetheless cut down on wait times and minimize errors, the agency said. The Electronic Tax Administration Advisory Committee (ETAAC) and the IRS Advisory Council (IRSAC) had recommended e-filing of amended returns for years.

What to Expect

Few things are as slow and tedious as filing a paper tax return through snail mail, and taxpayers have historically been instructed to wait at least three weeks after mailing an amended return to even think about checking its status. It could then take another 16 weeks for the IRS to actually process the form.

"This new process is a major milestone for the IRS, and it follows hard work by people across the agency," IRS Commissioner Chuck Rettig said in the release. 

The IRS warned in November 2020 that processing of paper returns is taking even longer during the ongoing coronavirus pandemic.

The IRS indicated on August 17, 2020 that e-filing of Forms 1040-X was available through tax software providers as of that date, and you can still mail in a paper Form 1040-X if you prefer—you're not limited to e-filing.

The standard advice on amended returns applies: Don’t amend your return to fix math errors. The IRS will take care of that for you. And don’t do it to include a form or schedule you forgot to submit. The IRS will request that from you after you’ve filed your original return and you can send it separately.

This doesn't require a whole revamping of your original Form 1040 unless you neglected to include schedules because you didn't claim a certain tax break that requires one. You should amend your return to claim missed tax breaks.

Taxpayers should amend returns to correct issues like claiming dependents, filing status, overlooked income, or overlooked or erroneous deductions and credits.

Taxpayers can continue to use the “Where’s My Amended Return?” tool on the IRS website or call 866-464-2050 to check on the status of their filing. The tool provides information on returns filed in the current year and three previous years. You'll need your Social Security number, your date of birth, and your zip code.

  • Electronic filing of amended returns is available as of August 2020 through available tax software products. 
  • More than 90% of taxpayers already file their standard tax returns electronically.
  • About 3 million taxpayers have been mailing in paper versions of the Form 1040-X each year, and processing can take months.
  • The IRS has strongly urged taxpayers to file returns electronically because of closures and staff shortages associated with the coronavirus pandemic.