Example #1

An individual files an original return late, on June 20, 2018, for tax year 2015. The return reports $12,000 of tax, claims $10,000 in estimated payments, and is accompanied by a payment of $2,000 for the remaining tax balance. The individual files an amended return on August 15, 2020, reporting a $6,000 decrease in tax and claiming a refund for the $6,000 reduction in tax. Since the amended return was filed within four years of the original return, but the original return was not filed timely, the refund that may be claimed with the amended return is limited to payments made in the four years preceding the filing of the amended return. The estimated payments were made more than four years prior to the filing of the amended return. Therefore, no refund is allowed for any part of the estimated payments and the refund allowed to the taxpayer is limited to the $2,000 of tax paid with the original return within the four years preceding the filing of the amended return.