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Tax Credit Consulting: Tax Credit Time Limits Gorham ME

The Internal Revenue Service has a statute of limitations on its various functions. You have six years to file a tax return for a given year. The IRS has six years in which to audit your return from the date it is filed. The IRS also has ten years to collect any owed taxes plus penalties and interest. The ten years and six years periods are timed from the date the return is filed.

Michael John DellOlio (RFC®), JD, MBA
(207) 294-0401
16 Middle Street
Saco, ME
Company
Michael J. DellOlio & Associates, L.L.C.
Qualifications
Education: B.S.,MBA,J.D.,NASD Series 6,7,24,63,65; Maine Insurance License
Years of Experience: 24
Membership
IARFC
Services
Invoice, Estate Planning, Business Planning, Portfolio Management, Trustee Service, Pension Planning, Retirement Planning, Tax Planning, Tax Returns, Employee Benefits, Stocks and Bonds, Mutual Funds, CD Banking, Annuities, Life Insurance, Disability Income Insurance, Long Term Care Insurance, Medical Insurance, BuySell, Compensation Plans

Data Provided by:
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252 Saint John St
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(207) 775-1972
400 Maine Mall Rd
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(207) 871-0123
477 Congress St Ste 1005
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Johnson Virginia M
(207) 772-2322
686 Brighton Ave
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Jackson Hewitt
(207) 899-1540
34 Atlantic Pl
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Austin Associates PA CPA
(207) 892-6642
183 Us Route 1
Portland, ME
 
Hutnak Stephen A LLC
(207) 772-1600
100 Middle St Ste 401
Portland, ME
 
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Tax Credit Consulting: Tax Credit Time Limits

The IRS Time Limits for Tax Credits

The time limit for the claiming of tax credits is tied to the IRS statute of limitations. The statute of limitations are essentially an arbitrary deadline even the IRS has trouble jumping.

The IRS Time Limits for Tax Credits

The Internal Revenue Service has a statute of limitations on its various functions. You have six years to file a tax return for a given year. The IRS has six years in which to audit your return from the date it is filed. The IRS also has ten years to collect any owed taxes plus penalties and interest. The ten years and six years periods are timed from the date the return is filed.

So, does this mean that if you file your tax returns and then discover at a later date that you should have been eligible for a tax credit that you never claimed, you can file an amended return and get credit for your missed credit? The answer is most certainly you can as long as you discover your omission within six years from the time the original return was filed.

Remember, the IRS has the same right to discover and correct an error through the audit process. If you have claimed a tax credit, for example, and several years later, you are audited, the IRS might discover that you were not entitled to that credit. Your tax will be adjusted accordingly and you will owe the difference. In some cases, you might owe additional penalties or interest.

For the most part, tax credits must be applied to the year in which they occur. If the tax credit is so high that it reduces your tax to zero, you are going to just lose the excess. There are a couple of taxes that can reduce your tax liability below zero and result in a refund even if you have not had any income withheld. These credits are called refundable credits. The Earned Income Credit and the Additional Child Care Credit are refundable credits.

There are also some credits that are called "carryover" credits. They allow you to carryover excess amounts to future years...

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