40 Million Taxpayers Forget To Collect The Telephone Excise Tax

Remember the telephone excise tax? For 40 million taxpayers, the answer is “no.” From Kiplingers:

Although nearly everyone who had a phone at any time between March 1, 2003, and July 31, 2006, deserved the credit, the IRS says that 30% of taxpayers failed to claim it. That means 40 million taxpayers missed the boat … and a chance to boost their refund (or cut their tax due) by $30, $40, $50 or $60.

You can still pry your money from the government by spending fifteen minutes with Form 1040X. X as in, remember the X-cise tax. Kiplinger’s has a step-by-step guide to claim the credit that is rightfully yours. — CAREY GREENBERG-BERGER

Taxpayer Snafus [Kiplingers]
PREVIOUSLY: So, You *#$@%& Up Your Tax Return? Here’s How To Fix It
IRS Form 1040X (PDF)


Edit Your Comment

  1. weave says:

    I got mine because I used the H&R Taxcut software and it handled it — which by the way was free thanks to a hot “deals” tip posted on Consumerist about two months ago! :)

  2. Deryn says:

    TurboTax also handled that part for me. Just not the actual filing-on-time part.

  3. lastfm says:

    I didn’t claim the excise tax refund, because I never paid an excise tax. My only phone was a prepaid cellphone that I never had to pay an excise tax for.

  4. NeoteriX says:


    But its FREE MONEY. :)

  5. lastfm says:

    I don’t take money that is not mine. Any tips I get on my job, I give away. Not only because it is against company policy, but I would also have to include all my tips with my income. I don’t want to keep track of that, I am not good at math.

  6. mac-phisto says:


  7. kimmie says:

    Interestingly, Turbotax specifically told me I *wasn’t* eligible for this deduction, because I claimed 0 this year (I’ve been owing for so many years, I thought claiming 0 would help resolve that). I had no idea not claiming myself would change the fact that I paid that telephone tax for three years.

    I switched over to Taxcut and it was much nicer about this deduction.

  8. swalve says:

    kimmie- What? I think Turbotax messed up. You can have them withhold 0 from your pay (or whatever number you want, provided it’s reasonable), but the number you put on your 1040 should only reflect the reality of your tax paying status. The more you put on the 1040, the less tax you owe. Every person gets one exemption: you get to claim your dependents’, and if you are someone else’s dependent, you can’t claim yours.

    So if you put zero and you’re entitled to one, you owe MORE money.

    (YMMV, IANATL, etc.)

  9. kimmie says:

    No no, if you claim 0, they take more taxes out during the year. Perhaps I stated that wrong in my initial post. Regardless, I was only trying to make the point that Turbotax may not have given as many people the opportunity to take the telephone excise tax.

  10. JShore says:

    @kimmie: Same here, Turbo Tax also said that I was not eligible.

  11. Jim Kosmicki says:

    Maybe I’m a boyscout too, but I did not have long-distance on my phone service during those years. I did not pay that excise tax, so I did not claim it. Given the shift to cell-phones and phonecards for long-distance, maybe there’s 40 million honest taxpayers out there, who read the question, said, “I didn’t have long-distance then” and didn’t take it. There’s at least one: me.

  12. SmoovyG says:

    TurboTax tried to tell me I was eligible for 3 people since my wife and I had a baby last year. I decided against taking the extra credit for my 14 month old.