Getting your tax return rejected by the IRS can mark the outset of a serious freak-out session. Thankfully the process of correcting and re-submitting your return often turns out to be fairly painless. Once you file your annual tax return, the IRS can reject it if it contains conflicting information. If the IRS rejects your return, you are responsible for correcting the errors. Until the IRS accepts your return, your filing status is incomplete. Even though the process of preparing your return may seem intimidating and complicated, paying attention to the small details can make a difference. You are not required to file an amended return if your return is rejected. All you need to do is correct the return and resubmit it.
IRS Reject Code 0501 – indicates that the Social Security Number and last name entered for the qualifying child does not match what the IRS and/or Social Security Administration have on file. The qualifying Social Security Number of the dependent on Schedule EIC, Earned Income Credit, must match data from the IRS Master File.
Solutions:
- Verify the qualifying child’s SSN and name. Check for spelling and transposition errors. Ask to see the Social Security card or birth certificate of the qualifying child. Have the taxpayer check their records (e.g., birth certificate or Prior Year return). If the data entered is incorrect, make the corrections and retransmit the return.
- If the data is correct, have the taxpayer contact the Social Security Administration.
IRS Reject Code 0502 – indicates that the EIN (Employer Identification Number) entered on a W-2 or 1099 is not correct. The IRS attempts to match the EIN to the first four letters of the company name. Please check the EIN and company name that were entered into the tax return against the original W-2 or 1099 document.
Solutions:
- Verify the information entered, check the EIN and company name that were entered into the tax return against the original W-2 or 1099 document., If the data entered is incorrect, make the corrections and retransmit the return.
- If it appears that the EIN and company name are entered into the return exactly as they appear on the W-2 or 1099, contact the employer to verify that the EIN was printed correctly when issued to the taxpayer.
IRS Reject Code 0503 – indicates that the Spouse’s Social Security Number and the first 4 letters of the spouse’s last name do not match IRS records. The IRS uses data provided by the Social Security Administration to verify this information.
Solutions:
- Verify the name, SSN or Individual Taxpayer Identification Number (ITIN). Ask to see the Social Security card of the spouse. Check for spelling and transposition errors. If the data entered is incorrect, make the corrections and retransmit the return.
- If the secondary taxpayer has changed their name but has not notified the Social Security Administration, have the taxpayer contact the SSA. It may take the SSA up to 10 days to notify the IRS after they have updated their files. Afterward, an electronic return can be resubmitted.
- If you are certain that the spouse’s last name and SSN are both entered correctly into the tax return, the taxpayer will need to check with their local Social Security Administration office to ensure that the information that is on file is correct. The taxpayer may also call the Social Security Administration at 800.772.1213 for assistance with this issue.
IRS Reject Code 0504 – indicates that a dependent’s Social Security Number (SSN) and the first four letters of the dependent’s last name do not match IRS records. The IRS uses data provided by the Social Security Administration to verify this information.
Solutions:
- Verify the name, SSN or Individual Taxpayer Identification Number (ITIN). Ask to see the Social Security card of the dependent. Check for spelling and transposition errors. If the data entered is incorrect, make the corrections and retransmit the return.
- If you have verified the information and the return is still being rejected, advise the taxpayer to contact the Social Security Administration to verify the dependent’s last name. If a correction is required, it may take the Social Security Administration up to 10 days to notify the IRS after they have updated their files. Afterward, an electronic return can be resubmitted.
- If you are certain that the dependent’s last name and SSN are entered correctly into the tax return, the taxpayer will need to check with their local Social Security Administration office to ensure that the information that is on file is correct. The taxpayer may also call the Social Security Administration at 800.772.1213 for assistance with this issue.
IRS Reject Code 0506 – indicates that one of the dependents on the return has already been claimed on another return for the purpose of Earned Income Credit (EIC).
Solutions:
- Verify the name or Social Security Number. Check for spelling and transposition errors. If the data entered is incorrect, make the corrections and retransmit the return.
- NOTE: If the taxpayer is entitled to claim the dependent(s), a paper return should be filed and mailed directly to the IRS. Documentation may be necessary to claim a dependent if there is a dispute.
IRS Reject Code 0507 – indicates that one of the dependent’s Social Security Numbers claim on the tax return and/or Schedule EIC, Earned Income Credit has been used on another tax return. This could be the result of an inadvertent data entry error or someone else has claimed this dependent.
Solutions:
- Verify the name, SSN or Taxpayer Identification Number (ITIN). Check for spelling and transposition errors. If the data entered is incorrect, make the corrections and retransmit the return.
- If the data is correct, explain to the taxpayer that the dependent’s SSN was already used and a paper return must be filed. Mail the return and attach all required documents (Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents, a copy of Divorce or Separation agreement or other supporting documentation, etc.).
IRS Reject Code 0515 – indicates that a return has already been filed using the Social Security Number (SSN) entered on the return for this taxpayer.
Solutions:
- Make sure the taxpayer has not filed their return with another tax preparer or filed it themselves. Also, verify the SSN that was entered into the program. If the SSN matches what is on the taxpayer’s Social Security Card, and has been correctly entered into the client’s tax return, the return must be mailed to the IRS. If the taxpayer has questions you should refer them to the IRS Tax Assistance Office at 1.800.829.1040.
IRS Reject Codes 0522 and 0523 – indicate the Date of Birth (DOB) of the primary taxpayer (ERC 0522) or spouse (ERC 0523) does not match the IRS Master File. The DOB is required to authenticate the taxpayer’s Self-Select Personal Identification Number (PIN) which acts as the taxpayers’ signature when filing an online return.
Solutions:
- Verify that you have entered the correct DOB for the primary taxpayer or the spouse. If the data entered is incorrect, make the corrections and retransmit the return.
- If the data was entered correctly and the information on the IRS Master File is incorrect, advise the taxpayer to call the Social Security Administration to have it corrected. If a correction is required, it may take the SSA up to 10 days to notify the IRS after they have updated their files. Afterward, an electronic return can be resubmitted.
