Participants in Bright Directions plans can't file Illinois taxes online with the state's MyTaxIllinois Program this year
CHICAGO (CBS) -- The tax deadline for this year is less than two weeks away – and if you typically file directly with the state and have not yet done so, CBS 2 discovered a change with the state's system that makes it impossible for many to file online.
CBS 2's Tara Molina brought the issue to a tax expert, who says the change is impacting thousands.
Many head to the Illinois Department of Revenue's MyTax Illinois website to file their taxes, for free, directly with the state.
If you're one of those people, and you haven't visited MyTax Illinois yet, certified public accountant Wilson Atiabet says there's something you need to know.
"There has been a lot of uproar," Atiabet said. "A lot of people are disgruntled with the fact they cannot file online - especially the participants with the 529 Bright Start program."
Any resident with a Bright Directions college savings plan, through the state, is affected - and can't file online this year.
"This year, unfortunately, there is just nothing you can do," Atiabet said.
Why? A spokeswoman for the Illinois Department of Revenue told us it's due to quote "fraudulent filing activity," and due to limits with the site they enhanced with security measures. The consequence is that anyone writing off a Bright Directions plan has to find another way to file.
Atiabet told us there are three options. One is to find another means through which you can file online.
"Just use one professional software program," he said. "TaxWise is there. You have TurboTax. You have TaxAct."
The other options, Atiabet said, are dropping your taxes off at any Illinois Department of Revenue Office, or mailing them via the U.S. Postal Service.
"There's a lot of last-minute filers," Atiabet said. "Trust me."
Molina followed up with the state - asking why they didn't share this information ahead of tax season with those affected, and if they're hearing from people learning about the change for this first time when they go to file.
Spokeswoman Maura Kownacki said, "With the updated MyTax Illinois, certain schedules were not able to be set in place due to programming limitations for the current filing season." She went on to say the state is sharing information with those who reach out - and they believe MyTax Illinois will work for everyone next tax season.
"Something is being done right now to ensure that next year, folks will be able to go back on MyTax Illinois and file their taxes without any hitches," Atiabet said.
Don't forget that tax deadline is Tuesday, April 18.
The following is the full official statement on this matter from the Illinois Department of Revenue:
"Last year, the Illinois Department of Revenue (IDOR) proactively discontinued the use of its MyTax Illinois non-login filing option during the early part of the tax season due to fraudulent filing activity that was identified through our various security measures. Since most MyTax Illinois individual income tax filers utilize our free non-login filing option, we improved MyTax Illinois for this tax season, enhancing security, and were once again able to make the non-login free filing option available, allowing taxpayers to file returns with or without an account. The improved site now also operates with a simple question and answer format, and works to reduce errors by using automated calculations and prepopulated information from previous returns. The system also allows taxpayers to report income, pay electronically or receive quick refunds with direct deposit, and receive immediate confirmation after returns are submitted.
"The deductions currently offered on MyTaxIllinois are the most used line items based on historical filings. Due to programming limitations with the enhanced site, we were not able to include Bright Directions, the state of Illinois' 529 college savings plan, as a subtraction this year for MyTax Illinois filers. It is anticipated that the subtraction for Bright Start will be available next year, however.
"Please Note: For taxpayers wishing to file electronically, IDOR has approved 33 vendors this year. Our website has a listing of approved software vendors: https://tax.illinois.gov/individuals/file/approvedthirdpartyiitfilers.html
The IRS also provides an option to search for tax professionals by ZIP code and state as well: https://www.irs.gov/e-file-providers/authorized-irs-e-file-providers-for-individuals
"These options allow the submission of an electronic return, which we encourage along with direct deposit, to receive refunds as quickly as possible."
Molina also had some specific questions for the Department of Revenue. Molina's questions and Kownacki's answers follow:
Q: Exactly who is impacted by this change with the online filing system? Just those involved with Bright Directions? If not, which other programs are impacted?
A: MyTax Illinois is the Illinois Department of Revenue's free online account management program that allows taxpayers to file returns, make payments, and manage their tax accounts. MyTax Illinois allows a taxpayer to free file their Illinois individual income tax return (Form IL-1040). My Tax Illinois is just one option individuals can choose from when filing their Illinois tax return. Other options include using a tax preparer, third-party software, or self-filing on paper.
With the updated MyTax Illinois, certain schedules were not able to be set in place due to programming limitations for the current filing season. For instance, Schedule M, which is what an individual would need to use when they would like to claim a subtraction for a 529 college savings plan (e.g. Bright Directions, Bright Start). We anticipate this option will be available in time for next year's individual income tax filing season, however.
Q: Is the state hearing concerns about this?
A: Anyone who has or will inquire will be told that we anticipate this option will be available in time for next year's individual income tax filing season and made aware of all the different options to file.
Q: Was the fraud issue directly related to Bright Directions, or other programs, in filing? Can you elaborate?
A: No. it was not. Last year, the Illinois Department of Revenue (IDOR) proactively discontinued the use of its MyTax Illinois non-login filing option during the early part of the tax season due to suspected fraudulent filing activity that was identified through our various security measures. There was no breach of information within the department. Fraudsters make regular attempts to defraud state and federal tax departments. IDOR works vigilantly to protect taxpayers from tax fraud by coordinating with the Internal Revenue Service and other states.
Q: Confirming this fraud issue is being addressed and those impacted this year will not be impacted next year?
A: As stated, last year, the Illinois Department of Revenue (IDOR) proactively discontinued the use of its MyTax Illinois non-login filing option during the early part of the tax season due to suspected fraudulent filing activity that was identified through our various security measures. There was no breach of information within the department. The safety measures were put in place last year and a log in was required.
By verifying information on tax returns before issuing refunds, in just the last year alone, IDOR prevented over $62 million in fraudulent or erroneous refunds from being issued.Once fraudulent activity was detected at the beginning of the tax season last year, taxpayers were required to file having an account or file a paper return.
And again, as addressed in an earlier question, with the updated MyTax Illinois, certain schedules were not able to be set in place due to programming limitations for the current filing season. For instance, Schedule M, which is what an individual would need to use when they would like to claim a subtraction for a 529 college savings plan (e.g. Bright Directions, Bright Start). We anticipate this option will be available in time for next year's individual income tax filing season, however.
Q: What should those, who are used to filing with the state, know ahead of the deadline that's quickly approaching?
A: We encourage those taxpayers who have not yet filed to do so soon and file electronically with direct deposit to ensure the most efficient processing and issuance of any refunds. Taxpayers may file electronic returns for free by using our recently enhanced online account management program MyTax Illinoisand electronic filing is also available through third party software or with most tax preparers.
MyTax Illinois has been improved this year to make filing easier than ever. The system now includes a simple question and answer format, along with tax information prepopulated from previous returns. Taxpayers can also file their individual income tax returns using MyTax Illinois with or without an account and receive immediate confirmation once their returns have been submitted. Again, we anticipate Schedule M, which is what an individual would need to use when they would like to claim a subtraction for a 529 college savings plan (e.g. Bright Directions, Bright Start) will be available next tax filing season.
If a taxpayer electronically files an error-free return, they should receive a direct deposit refund in approximately four weeks. Last year, IDOR received a total of nearly 6.2 million IL-1040 returns. Of those returns received, close to 5.6 million were filed electronically, or 90.3%.
Q: Any other info that would be good to get out there from IDOR ahead of tax deadline?
To assist taxpayers with last minute questions, IDOR will have extended telephone hours on Friday, April 14 from 8:00 a.m. to 7:00 p.m. and Monday, April 17 and Tuesday, April 18 from 7:30 a.m. to 7:00 p.m. at 1-800-732-8866. The automated line also provides assistance 24 hours a day, 7 days a week.
For the most up-to-date information, forms, schedules, and instructions for the 2023 tax season, please visit IDOR's website at: tax.illinois.gov.
