1040 - Common IRS Rejections

 
 Rule Number   
  

 Rule Text and Possible Causes

'PrimaryPriorYearPIN' or 'PrimaryPriorYearAGIAmt' in the Return Header must match the e-File database.

Possible Causes:

This rejection affects tax years where you are able to use your Prior Year AGI for EIC purposes (Tax Year 2020 & Tax Year 2021). If you are using your prior year AGI and get this rejection, it’s either one of two things.

1. The AGI you entered is correct but the IRS hasn’t processed the previous year's return yet. This wouldn't allow the IRS to have a tax return to match it. In this scenario, you would want to either paper file the return, not use the Prior Year's AGI, or wait for the IRS to process the previous year's return.
2. Or the prior year AGI that you entered doesn’t match what the IRS has in their database. In this scenario, you would want to review the previous year's return and ensure that you are entering the correct AGI.

The Primary Taxpayer did not enter a valid Identity Protection Personal Identification Number (IP PIN). Please visit www.irs.gov/getanippin for further information and resubmit your return with the correct number.

Possible Causes:

1. An IP PIN was entered and the IRS is saying that the IP PIN is incorrect.
2. Or you did not enter an IP PIN and the IRS is saying that the taxpayer does have an IP PIN.

Please Note: Taxpayers with IP PINs will get a new one every year so they need to always be using the current IP PIN, even if it’s a previous year's tax return.

The e-File database indicates that Form 8962 or a binary attachment with description containing "ACA Explanation" must be present in the return.

Possible Causes:

The IRS is saying that the taxpayer or someone in the tax family had health insurance through the marketplace and should have received a 1095-A. The information needs to be entered on the ACA questionnaire in the software. The software should then calculate a credit or a penalty and auto-add the 8962.

Each 'DependentSSN' and the corresponding 'DependentNameControlTxt' that has a value in 'DependentDetail' in the return must match the SSN and Name Control in the e-File database.

Possible Causes:

The IRS is saying that either the Dependent’s Last Name or the Dependent’s SSN doesn’t match what they have in their database.

The rejection in the software should show a “Data Value”, this data value will be the SSN of the dependent that the rejection refers to. The preparer should verify that the information was entered correctly.

An easy way to check this is to look back at the previous year's return for that taxpayer.

Unfortunately, if the information is indeed correct then the return would need to be paper filed; however, the preparer or taxpayer should contact the IRS to determine why the IRS database is incorrect.

The year of the 'PrimarySignatureDt' in the Return Header must be equal to the processing year.

Possible Causes:

This rejection will almost always be a previous year's return. The preparer needs to navigate to the 8879 and update the Signature Date field in Part II to a date in the current year.

Each ''QualifyingChildNameControlTxt'' that has a value on Schedule EIC(Form 1040), Line 1, and ''QualifyingChildSSN'' that has a value on Line 2, must match that in the e-File database.

Possible Causes:

The IRS is saying that either the Qualifying Child’s Last Name or the Qualifying Child’s SSN doesn’t match what they have in their database.

The rejection in the software should show a “Data Value”, this data value will be the SSN of the Qualifying Child that the rejection refers to.

The preparer should verify that the information was entered correctly. An easy way to check this is to look back at the previous year's return for that taxpayer.

Unfortunately, if the information is indeed correct then the return would need to be paper filed; however, the preparer or taxpayer should contact the IRS to determine why the IRS database is incorrect.

Form 8862 must be present in the return with Earned Income Credit Claimed Indicator checked. The e-File database indicates the taxpayer must file Form 8862 to claim Earned Income Credit after disallowance.   

Possible Causes:

The IRS is stating that at some point in time, this taxpayer was disallowed from taking either EIC, CTC, ACTC, COTD, or AOTC. Whenever a taxpayer is disallowed from taking EIC, they need to file form 8862 in any subsequent years where they are trying to claim that credit. The thing that most people miss is that there are multiple credits mentioned on that form. The form itself has 3 sections starting with Part II:

• Part II is for Earned Income Credit
• Part III is for Child Tax Credit, Additional Child Tax Credit, and Credit for Other Dependents
• Part IV is for the American Opportunity Credit.

If the customer is claiming more than one of those credits, they will need to fill out all the sections that apply to them.

For example: If they are taking EIC and CTC, then they need to fill out Part II and Part III. 

If they are only taking one of the credits, then they would just need to fill out the corresponding section.

A Dependent SSN in ''DependentDetail'' on the return was used as a Dependent SSN on a previously accepted return for the same tax period.

Possible Causes:

The IRS is saying that one of the dependents listed on the return has already been claimed on another return that they have accepted (not necessarily from the same tax preparer).

A lot of times it’s just a typo in the Dependents SSN; however, if the SSN is accurate, then they will need to paper file the return in order to claim that dependent. They should also contact the IRS to open up a case of fraud if they are legitimately the ones who should be claiming that dependent. 

Form W-2, Line B ''EmployerEIN'' must match data in the eFile database.

Possible Causes:

The IRS is saying that the Employer EIN on the taxpayer’s W2 doesn’t match what the IRS has in its database. If there isn’t a typo in the EIN and it does match the W2 that the taxpayer got, then the taxpayer should contact his employer to get a corrected W2.

Form 8862 must be present in the return with Child Tax Credit/Additional Child Tax Credit/Credit for Other Dependents Claimed Indicator checked. The e-File database indicates the taxpayer must file Form 8862 to claim Child Tax Credit or Other Dependent Credit or Additional Child Tax Credit after disallowance.

Possible Causes:

The IRS is stating that at some point in time, this taxpayer was disallowed from taking either EIC, CTC, ACTC, COTD, or AOTC. Whenever a taxpayer is disallowed from taking EIC, they need to file form 8862 in any subsequent years where they are trying to claim that credit. The thing that most people miss is that there are multiple credits mentioned on that form. The form itself has 3 sections starting with Part II:

• Part II is for Earned Income Credit
• Part III is for Child Tax Credit, Additional Child Tax Credit, and Credit for Other Dependents
• Part IV is for the American Opportunity Credit.

If the customer is claiming more than one of those credits, they will need to fill out all the sections that apply to them.

For example: If they are taking EIC and CTC, then they need to fill out Part II and Part III.

If they are only taking one of the credits, then they would just need to fill out the corresponding section. 

For each child on Schedule EIC (Form 1040), ''QualifyingChildSSN'' and ''ChildBirthYr'' must match that in the e-File database.

Possible Causes:

The IRS is saying that either the Qualifying Child’s SSN or the Qualifying Child’s Birth Year doesn’t match what they have in their database.

The rejection in the software should show a “Data Value”, this data value will be the SSN of the dependent that the rejection refers to.

The preparer should verify that the information was entered correctly. An easy way to check this is to look back at the previous year's return for that taxpayer.

Unfortunately, if the information is indeed correct then the return would need to be paper filed; however, the preparer or taxpayer should contact the IRS to determine why the IRS database is incorrect.

Electronic Filing Identification Number (EFIN) in the Return Header must be listed in the e-File database and in accepted status.

Possible Causes: 

The most common reason for this rejection is a typo in the EFIN on the return; however, if the EFIN on the return is accurate and it is receiving this rejection, then the IRS has put this EFIN on hold for one reason or another.

Unfortunately, they don’t tell us what the reasoning is, the preparer will need to contact the IRS to find out the reason for the hold.   

Primary taxpayer's Identity Protection Personal Identification Number (IP PIN) must match the e-File database. Please double check your entry and resubmit your return with the correct number.

Possible Causes:

1. An IP PIN was entered and the IRS is saying that the IP PIN is incorrect.
2. Or there was no IP PIN entered and the IRS is saying that the taxpayer does have an IP PIN.

Things to note, taxpayers with IP PINs will get a new one every year so they need to always be using the current IP PIN, even if it’s a previous year's tax return. 

The Dependent/Qualifying Person Identity Protection Personal Identification Number (IP PIN) provided on the return is not valid. Please visit www.irs.gov/getanippin for further information and resubmit your return with the correct number.

Possible Causes:

1. An IP PIN was entered for the dependent and the IRS is saying that the IP PIN is wrong.
2. Or there was no IP PIN entered and the IRS is saying that the dependent does have an IP PIN.

Things to note, anyone with an IP PIN will get a new one every year so they need to always be using the current IP PIN, even if it’s a previous year's tax return. 

Schedule H (Form 1040), ''EmployerEIN'' and ''EmployerNameControlTxt'' must match data in the e-File database.

Possible Causes:

The IRS has a database of Employer EINs and associated Employer Names. What this reject means is that Employer EIN or Employer Name entered on the Schedule H doesn’t match what the IRS has in its database.

A Dependent SSN in the return must not be the same as the Primary or Spouse SSN on another return where ''PrimaryClaimAsDependentInd'' or ''SpouseClaimAsDependentInd'' is not checked.

Possible Causes:

The IRS is saying that one of the dependents claimed on that return has already filed a return without marking themselves as a dependent.

This is either going to be a typo on the Dependent’s SSN that just happens to match the SSN of a taxpayer that has already filed in which case they just need to fix the SSN of the Dependent and resubmit.

The other case is that the dependent did in fact purposely or accidentally file a return without marking themselves as a dependent. In this scenario, you would want the dependent to amend their return to reflect the fact that they are a dependent, and then you would want to paper file the return with the rejection, as the IRS won’t update the dependent’s tax record quickly enough for an electronic filing to go through.

Schedule 8812 (Form 1040), ''OtherDependentCnt'' must be equal to the number of dependents with ''EligibleForODCInd'' checked in the return.

Possible Causes:

The most common reason for this rejection is a manual override on the 8812 for the number of dependents eligible for the Other Dependent Credit. Each dependent on the Client Data Screen of the return that is eligible for the other dependent credit should be marked as such and the 8812 will pull that count automatically.

Form 2441, Part II, Line 2(a) each ''QualifyingPersonNameControl'' and the corresponding Line 2(b) ''QualifyingPersonSSN'' must match data from the e-File database.

Possible Causes:

The IRS is saying that either the SSN or the Last Name of the Child or dependent entered in part 2 of the 2441 doesn’t match what they have in their database.

If there is more than one child or dependent listed in part two, you can check the “Data Value” in the rejection message to find out which child or dependent the rejection is referring to.

For each student in Form 8863, Line 20 ''StudentNameControlTxt'' and Line 21 ''StudentSSN'' must match e-File database.

Possible Causes:

The IRS is saying that either the SSN or the Last Name of the student entered on the 8863PIII doesn’t match what they have in their database.

If there is more than one student listed on an 8863, you can check the “Data Value” in the rejection message to find out which student the rejection is referring to.

Form 8862 must be present in the return with American Opportunity Tax Credit Claimed Indicator checked. The e-File database indicates the taxpayer must file Form 8862 to claim American Opportunity Tax Credit after disallowance. 

Possible Causes:

The IRS is stating that at some point in time, this taxpayer was disallowed from taking either EIC, CTC, ACTC, COTD, or AOTC. Whenever a taxpayer is disallowed from taking EIC, they need to file form 8862 in any subsequent years where they are trying to claim that credit. The thing that most people miss is that there are multiple credits mentioned on that form. The form itself has 3 sections starting with Part II:

• Part II is for Earned Income Credit
• Part III is for Child Tax Credit, Additional Child Tax Credit, and Credit for Other Dependents
• Part IV is for the American Opportunity Credit.

If the customer is claiming more than one of those credits, they will need to fill out all the sections that apply to them.

For example: If they are taking EIC and CTC, then they need to fill out Part II and Part III.

If they are only taking one of the credits, then they would just need to fill out the corresponding section.

Form 5695 ''TotalEnergyCreditsStdPctCrAmt'' must be equal to 30% (0.30) of ''TotalEnergyCreditsAmt''.

Possible Causes:

This calculation should be done automatically by the software.

If you didn’t manually override any fields on the 5695, you should contact technical support so we can investigate why the system isn’t calculating this percentage correctly. 

Form 1099-R, ''PayerEIN'' must match data in the e-File database.

Possible Causes:

The IRS has a database of Payer EINs. What this reject means is that Payer EIN entered on the 1099-R doesn’t match what the IRS has in its database.