Filing Tax Returns During Chapter 13

The Filing Requirement

Chapter 13 debtors have a strict obligation to file all tax returns -- both before and during their bankruptcy case. This is not optional. Failure to file is one of the most common reasons Chapter 13 cases are dismissed.

The requirement comes from two sections of the Bankruptcy Code:

• 11 U.S.C. Section 1308: Before confirmation, you must file all tax returns that were due for the 4 tax years ending on the date of filing. If these returns are not filed, the court cannot confirm your plan.
• 11 U.S.C. Section 521(f): During the case, you must provide copies of tax returns (or transcripts) to the trustee each year.

Before You File: The 4-Year Look-Back

Section 1308 requires that all tax returns due for the 4 tax years before filing must be filed before your Chapter 13 plan can be confirmed. If you have unfiled returns, you typically have until the date of the Section 341 meeting of creditors (about 30-45 days after filing) to get them filed.

Example: If you file Chapter 13 in March 2026, you must have filed your tax returns for 2022, 2023, 2024, and 2025 (if the 2025 return is due before your 341 meeting). If any of these are missing, you must file them promptly.

What If Returns Are Missing?

• File them as soon as possible: Your attorney should make this a priority before the 341 meeting.
• Request a continuance: If you need more time, the court may grant a brief continuance of the 341 meeting to allow you to file.
• Substitute for Return (SFR): If the IRS prepared a return for you (SFR), that does not satisfy the Section 1308 requirement. You must file your own return.

During the Plan: Annual Filing Obligations

Every year during your Chapter 13 plan (typically 3-5 years), you must:

1. File your federal and state tax returns on time (by April 15, or October 15 with an extension).
2. Provide a copy to the trustee within the time required by local rules or the trustee's standing order (often within 7-14 days of filing).
3. Report any significant income changes that could affect your plan payments.

The trustee reviews your returns to monitor your income. If your income has increased significantly, the trustee may request a plan modification to increase your payments. Conversely, if your income has decreased, you may be able to modify the plan to reduce payments.

What the Trustee Looks For

• Income changes: Significant raises, new jobs, or loss of income
• Tax refund amounts: Large refunds may be required to be turned over (see Tax Refunds)
• New tax debts: If you owe taxes for years during the plan, those become post-petition debts that must be addressed
• Consistency: Your reported income on the return should match what you disclosed in your bankruptcy schedules and plan

Tax Refunds During Chapter 13

Whether you can keep your tax refund during Chapter 13 depends heavily on your district and your plan. For detailed information, see our Tax Refunds in Bankruptcy page.

In many districts, the trustee requires debtors to turn over all or a portion of their tax refunds to be distributed to creditors. Some districts have standing orders that set a specific threshold (for example, you keep the first $2,000 and turn over the rest). Other districts let you keep your refund entirely.

New Tax Debts During Chapter 13

If you incur new tax debt during your Chapter 13 plan (for example, you owe taxes for a year during the plan), this creates a problem. Post-petition tax debts are not covered by your plan and must be addressed separately.

• Staying current is critical: Your plan may require you to stay current on all post-petition tax obligations. Failure to do so can be grounds for dismissal.
• Plan modification: You may need to modify your plan to account for new tax obligations.
• Adjust withholding: If you are consistently owing taxes, increase your withholding or make estimated tax payments to prevent accumulating new debt.

Practical Tips

• File electronically: E-filing creates a clear record of when you filed, which is useful if the trustee questions timeliness.
• Keep copies of everything: Save copies of all filed returns, e-filing confirmations, and any correspondence with the IRS or state tax authority.
• Communicate with your trustee: If you are going to be late filing, contact the trustee proactively. A brief delay with communication is far better than silence.
• Set up estimated payments: If you are self-employed or have income not subject to withholding, make quarterly estimated tax payments to avoid year-end tax bills.
• Review your plan: Read your confirmed plan carefully to understand what it says about tax refunds, post-petition taxes, and income changes.

Frequently Asked Questions

Do I have to file tax returns during Chapter 13?

Yes. Under 11 U.S.C. Section 1308, you must file all returns for the 4 years before filing, and you must continue filing all returns on time every year during your plan. Failure to file is grounds for dismissal under Section 1307(c)(9).

What happens if I don't file my taxes during Chapter 13?

The trustee, IRS, or any creditor can move to dismiss your case. Dismissal ends your bankruptcy protection, reverses your discharge progress, and lets creditors resume collection. Some courts will give you a brief opportunity to catch up, but many will dismiss the case without much delay.

Does the trustee see my tax returns?

Yes. Under 11 U.S.C. Section 521(f), you must provide copies of your tax returns or transcripts to the trustee annually. The trustee uses this information to monitor your income and ensure your plan payments are appropriate. Significant income increases may lead to a motion to increase your plan payments.

Related Resources

Tax Refunds in Bankruptcy -- can the trustee take your refund?

Chapter 13 Plans -- how repayment plans work

Dismissed Bankruptcy -- what happens when your case is dismissed

Section 1328 Discharge -- completing your Chapter 13 and getting a discharge