Rejected Tax Return Common Reasons and How to Fix

Do you have a rejected tax return?

rejected tax returnFirst, don’t worry. If you e-filed your tax return and the IRS rejected it, you have a second chance to correct the mistakes and resubmit. In some cases, you may be able to retransmit the return electronically.  Other rejected returns may require you to file by paper and mail the corrected return with supporting documentation. It is not always a huge problem, but a rejected tax return it can be frustrating. Rejected returns can delay the processing of your tax return because it must be corrected to consider it filed so that it can be processed. There are some common reasons why the IRS rejects e-filed tax returns. The most common reasons are usually minor problems that can easily be corrected.  For example, you or a dependents Social Security number may be missing somewhere on the tax return.  What you can do when your return is rejected is identified by the IRS reject code. You will be notified why the return is rejected and the steps to take to correct the problem.  Below are the common reasons why the IRS has rejected a tax return:

IRS Rejected Tax Return Code 0501 – SSN/Name Mismatch

IRS reject code 0501 indicates that one or more of the dependents Social Security Number and last name spelling do not match the IRS Master File.  The IRS Master File is verified with data provided by the Social Security Administration.  This code may accompany IRS reject code 0504.

Solution:

Check the social security number and first four letters of the last name spelling on the dependent’s social security card. If the name or social security number of the tax return is incorrect you can correct the information and retransmit.  If the information is correct you can need to contact the local social security office or the Social Security Administration by calling 800-772-1213 for assistance.  It can take up to 10 days for the SSA to update the IRS with any corrections.  After the IRS is notified, an electronic return can be resubmitted.

IRS Rejected Tax Return Code 0502 – EIN/Name Mismatch

IRS reject code 0502 indicates that the EIN (Employer Identification Number) entered on a W-2 or a 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.

Solution:

Check the EIN and the first four letters of the company name spelling match the original W-2 or 1099 document(s).  If the name or EIN is incorrect, you can correct the information and retransmit.  If the information matches the documents provided to you, you need to contact the employer to verify they provided the correct EIN.

IRS Rejected Tax Return Code 0503 – Spouse SSN/Name Mismatch

The IRS code 0504 indicates that a spouses Social Security Number and the last name spelling do not match the IRS Master File. The IRS Master File is verified with data provided by the Social Security Administration.

Solution:

Check the social security number and first four letters of the last name spelling on the spouses social security card. If the name or social security number of the tax return is incorrect you can correct the information and retransmit.   If the information is correct you need to contact the local social security office or the Social Security Administration by calling 800-772-1213 for assistance.  It can take up to 10 days for the SSA to update the IRS with any corrections.  After the IRS is notified, an electronic return can be resubmitted.

IRS Rejected Tax Return Code 0504 – Dependent SSN/Name Mismatch

The IRS code 0504 indicates that one or more of the dependents Social Security Number and last name spelling do not match the IRS Master File.  The IRS Master File is verified with data provided by the Social Security Administration.

Solution:

Check the social security number and first four letters of the last name spelling on the dependent’s social security card. If the name or social security number of the tax return is incorrect you can correct the information and retransmit.  If the information is correct you can need to contact the local social security office or the Social Security Administration by calling 800-772-1213 for assistance.  It can take up to 10 days for the SSA to update the IRS with any corrections.  After the IRS is notified, an electronic return can be resubmitted.

IRS Rejected Tax Return Code 0506 – Dependent Already Claimed (EITC)

The IRS code 0506 indicates that one or more of the dependents have already been claimed on another tax return for the purpose of Earned Income Tax Credit (EITC).

Solution:

Check the social security number on the dependent’s social security card. If the name or social security number of the tax return is incorrect you can correct the information and retransmit.  If the information is correct and you are entitled to claim the dependent, you must file a paper return and you may be required to provide documentation that you are entitled to claim the dependent.

IRS Rejected Tax Return Code 0507 – Dependent Already Claimed

The IRS code 0507 indicates that one or more of the dependents have already been claimed on another tax return.

Solution:

Check the social security number on the dependent’s social security card. If the name or social security number of the tax return is incorrect you can correct the information and retransmit.    If the information is correct and you are entitled to claim the dependent following a divorce or separation you must file a paper return and you may be required to provide documentation that you are entitled to claim the dependent. In the event of Divorced or Separated Parent, Form 8332 Release of Claim to Exemption or a copy of the Divorce or separation agreement may be required as supporting documentation.

IRS Rejected Tax Return Code 0515 – SSN Already Claimed

The IRS code 0515 indicates that the Social Security number on the tax return has already been filed.

Solution

Check the social security number on the your social security card.  If social security number of the tax return is correct you must file a paper return.  You may contact the IRS Tax Assistance Office by calling 800-829-1040 if you have questions.

IRS Rejected Tax Return Codes 0522 and 0523 – DOB/Pin Mismatch

The IRS code 0522 and 0523 indicate the Date of Birth (DOB) of the primary taxpayer or spouse 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.

Solution:

Check your Date of Birth or your’s spouses Date of Birth entered on your tax return.  If it is incorrect, you can correct the information and resubmit the tax return.  If the information is correct you need to contact the local social security office or the Social Security Administration by calling 800-772-1213 for assistance.  It can take up to 10 days for the SSA to update the IRS with any corrections.  After the IRS is notified, an electronic return can be resubmitted.

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