What is the imperfect return election and when can it be used?
The Imperfect Return election must be activated in Setup > Options, on the EF tab. Once activated, you can invoke it in a return on the EF screen by checking the box Imperfect return election.
Returns that have been rejected by the IRS can be re-transmitted and accepted if the Imperfect Return Election is marked, but only if the rejection was with a code of SEIC-F1040-501-02 or R0000-504-02:
SEIC-F1040-501-02
Each 'QualifyingChildNameControl' that has a value on Schedule EIC(Form 1040A or 1040), Line 1, and 'QualifyingChildSSN' that has a value on Line 2, must match that in the e-File database.
R0000-504-02
Each 'DependentSSN' and the corresponding 'DependentNameControl' that has a value on Line 6c(2) of the return, must match the SSN and Name Control in the e-File database.
An acknowledgement code of "E" will be sent for e-filed imperfect returns.
Consider the following before marking a return with the imperfect return election:
- A return filed with this election will go into review mode while the accuracy of the dependent data is verified.
- You should expect this review process to cause a delay of any refund that is similar to what could be expected from mailing the return.
- The refund may be reduced based on potential disqualification of the dependent.
- Imperfect return processing takes approximately 4 – 6 weeks from the return’s acceptance date.
- If any calculations are changed as a result of processing the imperfect return, the taxpayer (or legal representative) will receive a math error notice from the IRS.
- Choosing the Imperfect Return Election may also affect the bank products for which the taxpayer is eligible.