Most students are hopefully aware of the tax credit that provides for a reduction of their yearly bill on a dollar-for-dollar basis of up to $2,500. Unfortunately this year, 600,000 students who filed their taxes with H&R Block (HRB) will have to wait an additional six weeks before their checks arrive. The company confirmed on Tuesday that there was an issue with returns containing form 8863, the one that must be filled out in order to take advantage of the credit in the first place.
The mishap resulted from a relatively minor change to the manner in which form 8863 is processed. Previously, the IRS permitted tax preparers to answer “no” to questions simply by leaving a field blank. This year, however, the process has been changed and at the least the letter “n” needs to be entered, otherwise the forms are delayed.
In a year that has already seen one two-week delay in the disbursement of returns, occasioned by partisan wrangling in Washington over the so-called fiscal cliff in late January, 10 percent of all returns filed with form 8863 will be affected.
H&R Block says it is currently working in tandem with the IRS in order to clear up the problem, but gave no indication about what steps it has so far taken or will take, or for how much longer those affected will have to wait. Students are in much the same boat as any struggling segment of the populace these days, and so another delay is likely to be unwelcome, as this has the potential to cause an unwelcome set of irritations ranging from late rent payments to bills that become more costly with the addition of onerous late fees, to simply not being able to buy day-to-day items.
Despite the mix-up and a good deal of negative feedback on their Facebook page, the company’s shares close at a gain of 1.35 percent, or $27.71 per share.