I'm going through something similar right now! My employer was also late submitting W-2 info, and I've been stuck with code 570 for about 10 days now. What's really frustrating is that we have to deal with the consequences of our employers' delays. I've been checking my transcript every couple days like some others mentioned, and honestly it's become a bit obsessive. The uncertainty is killing me because I had plans for that refund money too. Based on what others are saying here, it sounds like we just have to wait it out, but man, this whole system seems backwards - why should we be penalized for something our employers did wrong?

I'm going through the exact same thing right now! My employer also submitted W-2 info late (just found out yesterday they sent it in last week), and I've had code 570 on my transcript for about 8 days now. It's so frustrating because like you, I was counting on this refund for some important expenses. What really gets me is that we file everything correctly and on time, but then get stuck waiting because of something completely out of our control. I've been trying not to check my transcript obsessively, but it's hard when you're anxious about the money. From what I'm reading here though, it sounds like once the IRS processes your employer's submission, things should move along pretty quickly. Fingers crossed for both of us that we see that code 571 soon!

So I'm a mortgage underwriter and see this question occasionally. The mortgage subsidy recapture is definitely real, but there are several exemptions most people don't know about: 1) If you sell your home at a loss, no recapture tax is due 2) If your income doesn't exceed the qualifying income by more than 5% compounded annually, no recapture tax is due 3) If you refinanced into a conventional loan during the 9-year period, the rules get complicated (sometimes it still applies, sometimes not) For the original poster - yes, file the form. The amount owed decreases each year you own the home, and at 8 years 9 months, you're only paying 20% of the max recapture amount. The IRS doesn't typically hunt people down for this specific issue, but if you get audited for any reason, they will definitely catch it.

I'm dealing with this exact same situation right now! Bought my first home with an FHA loan in 2016 and just sold it last month after 7 years and 8 months. Found that same paperwork buried in my files and had a mini panic attack. After reading through all these responses, I'm definitely going to file Form 8828. The income exemption might save me though - my salary has gone up but I don't think it's increased by more than 5% annually compared to the area median income. One thing I learned from my closing documents is that the original "federally subsidized amount" was clearly stated in the disclosure I signed at purchase. It was buried on page 47 of my loan docs but it's there. If anyone else is looking for this number, check your HUD-1 settlement statement or the mortgage subsidy disclosure form you would have signed. Thanks everyone for the helpful info - this community is a lifesaver for navigating these obscure tax situations!

Pro tip: Check your transcripts early morning on friday, thats when they usually do the big updates

Based on my experience, it's usually 2-4 business days after your transcript updates for the account balance to hit zero. Once that happens, direct deposit typically takes another 1-3 business days. So you're probably looking at about a week total from transcript update to money in your account. The waiting game is rough but you're almost there!

My experience with Chime has been inconsistent. Last year got it 2 days early, this year got it right on the DDD date. I think it depends on what time of day the IRS actually releases the payment batch.

Chime user here! I've been using them for my tax refunds for the past 3 years. This year I got my deposit exactly 1 day early - my transcript showed a DDD of March 5th and it hit my Chime account on March 4th around 6 AM. In my experience, Chime typically gets deposits anywhere from same day to 2 days early, but it's not guaranteed. The timing really depends on when the IRS releases the batch and how quickly Chime processes it. I'd say expect it potentially 1-2 days early but don't count on it being more than that. Good luck!

Just want to add something important that nobody's mentioned yet. If your business is primarily providing personal services (like consulting), the IRS scrutinizes S Corp arrangements MUCH more closely. Look up "personal service corporation" rules. In your case, because the business value comes largely from you and your partner's personal expertise rather than equipment/inventory/employees, the IRS expects a higher percentage of profits to be paid as salary. I've seen cases where the IRS has reclassified ALL distributions as wages for businesses like law firms, medical practices and IT consulting where owners tried to take minimal salaries with large distributions. Document everything about how you determined your salary is "reasonable" - industry surveys, comparable positions, etc. Much safer to err on the side of higher wages, especially in service businesses.

Something nobody's mentioned - the S Corp strategy works best when there's significant profit ABOVE what would be considered reasonable salary. If you're only making $120k total in the business and reasonable salary is $100k, the hassle of S Corp maintenance probably isn't worth the small tax savings. But at $375k with two owners, you're definitely in the sweet spot where this strategy makes sense, even with higher reasonable salaries than you initially planned. Just budget for proper accounting help - S Corps require more formal accounting, separate payroll processing, and have stricter compliance requirements than LLCs. The additional costs can eat into your savings if you're not prepared for them.