The next season, Wallace was placed on the right of midfield for the first eleven games at the start of the season, before going on the left of midfield or wing before going back to right midfield. On 22 December 2012, Wallace scored his first goal of the season in a 2–2 draw against Birmingham City; his second came from a penalty, in a 2–0 win over Sheffield Wednesday and set up a goal for Keith Treacy on 1 January 2013. During the season, Wallace's contract with Burnley was on the verge of expiring at the end of the season and he stated that he was willing to stay at Burnley. In early February, Wallace signed a two-year extension, keeping him until 2015. In May 2015, Wallace was released by Burnley after five seasons with the club, making a total of 165 appearances in all competitions, scoring 14 times.