Why You May Need to Amend Your 2024 Tax Return to Claim Retroactive Refund Boosters

The OBBB tax package introduced several major refund-boosting deductions—including the Tips Deduction, Overtime Deduction, Working Families Deduction, and the Senior Bonus Deduction. What many taxpayers don’t realize is that several of these provisions are retroactive to the beginning of 2025, meaning some taxpayers may have already filed a return before tax software or payroll systems were updated with the new rules.

This creates a unique situation for the 2026 tax season:
You may need to file an amended return (Form 1040-X) to claim deductions you were entitled to but did not originally receive.

If you worked service industry jobs, earned overtime, supported dependents, or qualify as a senior, this guide explains why an amended return might increase your refund—and how to file it correctly.

Why an Amended Return May Be Necessary

Because the OBBB deductions became law quickly and mid-cycle, several issues occurred:

• Many early filers did not know about the new deductions
• Payroll systems did not update withholding tables in time
• Tax software did not immediately reflect the new law
• Some W-2s underreported eligible income categories
• IRS forms and instructions were revised after filing season began

As a result, tens of thousands of taxpayers may have filed returns without claiming deductions they fully qualify for.

An amended return using Form 1040-X allows you to correct that.

Which OBBB Deductions May Require an Amended Return?

Here are the retroactive deductions most likely to trigger a refund increase:

1. The Tips Deduction (Up to $25,000)

Service workers may deduct up to $25,000 in tip income.
If your W-2 or return did not include this deduction, you are eligible for a larger refund.

2. The Overtime Deduction (Up to $12,500)

Hourly workers who earned overtime may deduct up to $12,500 in qualifying overtime pay.

If you filed before this rule was implemented in software, you may benefit from amending.

3. The Working Families Deduction (WFD)

Low-income households who qualify for the WFD may need to amend their return if:

• Income was misclassified
• Deductions were missed
• The WFD was not applied automatically

This credit heavily affects refund amounts.

4. Senior Bonus Deduction ($6,000 per Senior)

Seniors age 65+ qualify for a large bonus deduction.
If both spouses are seniors, the deduction is $12,000.

If software did not account for it, an amended return could produce a significant refund increase.

Signs You May Benefit From Filing Form 1040-X

You should consider amending your 2024 return if:

• You filed early (January or February)
• You worked in service, hospitality, or earned large overtime
• You are age 65 or older
• Tax software did not apply new deductions
• Your refund seems lower than expected
• Your W-2 breakdown did not separate tips or overtime
• You had low income and may qualify for WFD
• You received IRS letters suggesting misreported income

Amending gives you the opportunity to correct omissions and claim deductions you legally qualify for.

How to File an Amended Return (Form 1040-X)

Filing an amended return is straightforward, but requires accuracy.

Here is the step-by-step process:

Step 1: Get a Copy of Your Original Return

You need the exact numbers reported on your original Form 1040.

Step 2: Gather Updated Information

Collect:

• Correct W-2 forms
• Tip and overtime documentation
• Proof of senior status (age verification)
• Updated tax statements
• Corrected 1099s if applicable

Step 3: Complete Form 1040-X

Form 1040-X includes three columns:

• Column A: Original amounts
• Column B: Changes (new deductions)
• Column C: Corrected amounts

Be sure to list each OBBB deduction separately in the explanation section.

Step 4: Attach Any Supporting Forms

For example:

• Revised Schedule 1 for new deductions
• Updated W-2 or tip/overtime documentation
• Revised dependent information
• Senior deduction worksheets

Step 5: File Electronically

Most amended returns can now be e-filed, which speeds up processing.

Paper filing is still allowed but takes significantly longer.

Step 6: Track Your Amended Return

Use the IRS tool “Where’s My Amended Return?”
Processing typically takes:

• 8–16 weeks electronically
• 12–20+ weeks by paper

The IRS must fully review your changes before releasing an additional refund.

How the IRS Will Handle the Additional Refund

If your amended return is approved, you will see updated transcript codes:

• TC 290 – Additional tax or correction
• TC 291 – Reduced tax (refund increase)
• TC 846 – Refund issued

Your transcript will confirm when the IRS releases the extra refund.

Important Notes Before Filing

1. Do not amend just because WMR is delayed

Amending incorrectly causes longer delays.

2. Only amend if you have a valid new deduction

Amendments must be supported by documentation.

3. Amending does not speed up your original refund

It only corrects your return for additional refund eligibility.

4. You generally have three years to amend

So you do not need to rush—but the sooner you amend, the faster you get the money.

Because OBBB deductions were implemented retroactively, thousands of taxpayers may have filed returns before the new law was reflected in payroll systems or tax software. If you missed out on the Tips Deduction, Overtime Deduction, Senior Bonus Deduction, or Working Families Deduction, filing Form 1040-X could put hundreds or even thousands of dollars back into your refund.

Correcting the return now ensures you capture every new deduction you’re entitled to under the updated tax law.