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Roger501
Level 3

Amend Federal Taxes withOUT amending state taxes

In Feb 2021, I filed my Federal taxes electronically with what I owed being deduced from my bank account on 4/15/21. I did not electronically file my state taxes & was planning on doing so by mail in April.

I benefitted by the tax change to deduct $10,200 from unemployment benefits. I still owed Federal taxes but much less. I elected to amend my Federal taxes because I now only wanted to exclude $10,200 from my unemployment but now I would not have to pay an underpayment penalty and I wanted to change the date of when I paid my amount due to the new deadline.

 

I went through the Federal tax amendment process in TurboTax. However, when I performed the final review, TurboTax noted that my state tax’s amendment forms were not complete (reasons, previous AGI etc.). Since I did not file (electronically or by mail) my state taxes, I should not need these state forms & I do not want to confuse anyone at the state by sending in amendment forms when I did not amend my state taxes.

 

How do I amend my federal taxes, have the new information flow to my state taxes and file my state taxes without amendment.

14 Replies
MarilynG1
Expert Alumni

Amend Federal Taxes withOUT amending state taxes

The IRS says NOT to Amend Your Return for the Unemployment Income Exclusion.

 

They will be sending out the additional refunds as a separate payment starting in May.  Your Underpayment Penalty will most likely also be included in this payment.  

 

Click this link for more info IRS Refunding for Unemployment Exclusion.

 

An amended return does not 'catch up' to your original return and correct it.  It is processed separately and takes several weeks.  You will probably get your additional refund from the IRS before your amended return is processed. 

 

This link has info on How to Undo an Amendment

 

Since you haven't filed your state return yet, you could wait until closer to the deadline to do so to be sure that the most recent updates are reflected. 

 

 

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Roger501
Level 3

Amend Federal Taxes withOUT amending state taxes

Thank you very much for the reply and information.  I read the advice regarding amendments & the new unemployment deduction from IRS, TurboTax & other news sources.  The advise is to not file an amendment if you ONLY want to get the deduction.  Per my original post, I want to also 1) not pay the underpayment penalty (I'm not convinced the IRS will hand this back to me) and 2) avoid paying in April when taxes are now due in May.  

 

Per my original post, I am not getting a refund before or after the new deduction.  I am simply paying less after the deduction.  It is better if I do not pay a larger amount in April then wait for the IRS to 'refund' me the difference in May.  It would be better to simply pay a smaller amount in May when my payment is now due.  

 

However, my bigger problem and what I see as an error in the TurboTax software, is TurboTax is assuming I have filed my state taxes - which I have not.  If I print my current state taxes for filing, TurboTax is send an amended return to my state when I have NOT filed or paid my state taxes.  

 

When I started the amendment process with TurboTax, I saw this problem, so I did NOT save the file when I exited the TurboTax software.  However, TurboTax must have saved that I was attempting an amendment because that is what my current file indicates.  

 

Is there any way to 'undo' a started amendment so that I can file my state taxes with the unemployment deduction withOUT the amendment forms. 

 

 

Irene2805
Expert Alumni

Amend Federal Taxes withOUT amending state taxes

Please follow the instructions in these TurboTax Help article to undo the amendment process and then amend your 2020 return:  

 

Pay particular attention when amending your return because the process has changed from previous years to allow e-filing of the amended return.

 

@Roger501

Roger501
Level 3

Amend Federal Taxes withOUT amending state taxes

Thank you again for the reply.  I followed the instructions in the first bulleted link in the latest reply.  Unfortunately, the instructions were incorrect as they said to remove form 1040X.  The actual name of the form is 1040-X.  I figured out the problem quickly and deleted my form 1040-X.  TurboTax now shows that I owe a smaller amount for Fed & State taxes in the small black 'Federal Tax Due' & 'MI Tax Due' windows at the top of the screen.  This is due to the unemployment deduction and removal of my underpayment penalty.  These windows showed refunds when I was amending my return as if I had over paid the amount due (which I have not yet done) and the amendment would get back my over payment with the net being the smaller amount I now owe. 

 

However, during the review, TurboTax shows 'Your Amended Return Summary,,,  We don't detect any differences between your original 2020 return and your amended return...' with a window for Explanation of Changes.  I left the Explanations blank and continued.  The next screen is for 'Print and Mail Your Returns' with 'Step 1: Print your amended returns'.  :(   

 

I went back to Forms view and looked for my 1040-X.  It was not listed. 

 

So, unfortunately deleting the 1040-X form does not fully undo an amended return.  Also, I am in a situation where I will over pay my taxes on 4/15 and hope the IRS refunds me most of my over payment because they recalculate my taxes with the unemployment deduction AND remove my penalty.  I do not have a lot of faith in this happening correctly or quickly. 

KathrynG3
Expert Alumni

Amend Federal Taxes withOUT amending state taxes

The IRS is renaming the amended return to Form 1040X, instead of Form 1040-X. The directions are updated to reflect that.

 

It may be that the cancelation is only partially complete.

 

In Forms mode, go to MI-1040 and look in the top right hand corner. Be sure this box is unchecked. Be sure to also delete Schedule AMD, Amended Return Explanation of Changes. See the screenshot below.

 

 

When you are in the FILE section of the Step-by-Step, at File a Return, check the option to e-file by toggling from File by mail  to E-file.

 

@Roger501

Roger501
Level 3

Amend Federal Taxes withOUT amending state taxes

Thank you again for the reply and information. 

 

I opened my taxes & went to Forms view.  I did not see the 1040-X form in my federal taxes but I used the Open Forms and searched for 1040-X & there was the Form 1040-X.  I opened that form and deleted it.  

 

Next I opened the MI-1040.  The Amended Return was NOT checked.  The Schedule AMD form was not in my MI taxes but I used the Open Form and found it in my MI taxes using the search function.  I opened that form and deleted it. 

 

I went back to Step-by-Step and selected the File tab. When I got to the E-file Your Federal Return for FREE, the E-file was selected. On the next page for filing my state return, I selected Do not e-file...  The last screen said 'You have no returns selected for e-filing'.  This all makes sense.  My taxes (Fed & state) appear to be correct with the unemployment deduction included. 

 

However, my problem as noted in my earlier post is that the Review process continues to note a "Your Amended Return Summary, We don't detect any differences between your original 2020 return and your amended return...".  Then there is a table to note my Explanation of Changes.  The next page indicates I can 'Print your amended returns'. 

 

So, even after deleting 1040-X, unchecking the Amended return box on my MI-1040 and deleting the Schedule AMD form from my MI taxes, TurboTax still has some indication I have amended my return.  However, the tax amount and the fact that I have nothing to e-file indicate that TurboTax is NOT amending my return.  

 

Thank you, 

 

Roger 

 

 

Roger501
Level 3

Amend Federal Taxes withOUT amending state taxes

Because I was unable to amend my taxes, the IRS has now taken out the taxes I owe WITHOUT the unemployment exemption & WITH an under payment penalty.  So now I am paying 4 times what I owe a month before the taxes are due. 

 

I know the US government's 'help' was the source of this problem but TurboTax just blew it.  Instead of recognizing that my payment was scheduled in advance, TurboTax assumed if my taxes were filed, they were also paid.  So, when I attempted to amend my taxes so I would pay the correct amount on the now current due date of May 17, TurboTax was attempting to file for a refund of taxes I had not paid.  

 

I was able to partially undo the amendment and could see what I actually owed.  However, I now have MI state taxes which still indicate that they are amended even though I have followed the advice provided to undo the amendment.  So, I cannot file my MI state taxes electronically because they would include a blank amendment form.  

 

So because of TurboTax, instead of paying what I owe in May, I have now significantly overpaid in advance. I am now hoping for the IRS to correctly calculate my new tax amount with the unemployment exception applied AND underpayment penalty removed.  Then receive my 'refund' of overpayment in a month.  

 

This is exactly what I was hoping to avoid because:

   I do not like paying my taxes in advance

   I do not like paying more than I owe

   I do not trust the IRS to correctly calculate my new tax because I have read that the IRS will not calculate     

        other tax breaks resulting from the effect of the unemployment exemption. 

   I have to wait for the IRS to send me a refund. 

   I cannot file my MI state taxes 

MaryM428
Level 10

Amend Federal Taxes withOUT amending state taxes

TurboTax does not know that you scheduled a payment or if that payment was cancelled.  It is up to the taxpayer to cancel the payment, if they do not want it to be processed.  

The IRS will start issuing refunds for the overpayment of taxes on unemployment in May.

TurboTax is still working with some states on issues with the unemployment and users will not be able to e-file returns with unemployment until all issues are resolved and updated in TurboTax.

 

Roger501
Level 3

Amend Federal Taxes withOUT amending state taxes

Thank you for the reply.  I do understand that much of this is caused by the US government making changes in exemptions and due dates in March.  TurboTax should not have to sift through IRS changes in March to make changes to a software process that many people have already started and even completed.  

 

However, TurboTax DOES know that a payment is scheduled because this date is entered into TT software so that it can be transmitted to the IRS when Federal taxes are filed electronically. TT could have reviewed this date and asked in the interview if this payment was still scheduled or provide IRS instructions on how to cancel. Then use that information to calculate an amendment payment.  

 

I spoke with TT Customer Service.  They were unable to prevent TT from thinking I still have an amended return.  We went through the delete 1040-X form and unchecking the MI-1040 box indicating but TT's review still asked me to complete Explanation of Changes for my Amended Return.  We verified the MI states were now without the amendment and I could file via mail when the taxes are due in May.  The TT Rep also provided me with the IRS.gov ACH Debit phone number. 

 

The IRS rep was less than helpful.  I was told not to file an amendment to correct my filed taxes for the change in amount that I owed.  The IRS was going to solve this overpayment by providing me with a refund in May. When I noted that this process solves the amount change but not the due date change, the IRS rep simply blamed me for filing my taxes in March and requesting money be taken out of my account on the original due date in April. I asked how could I change the date of my payment to the new due date withOUT filing an amendment, he said there was no way to do it.  When I asked what I was suppose to do to prevent over paying my taxes a month in advance of the new due date, he hung up on me. So, I called my bank and stopped payment on my ACH debit to the IRS.  

 

I would have been nice if TT software would have allowed me to amendment my taxes by e-filing a new return  in early April with the new amount (unemployment exemption included & knowing that my payment had not been made yet) to be paid on the new due date (May).  Still I know the IRS was likely the obstacle in this simple solution.  

 

My current 'plan' is to print out my federal return which now has the correct amount for the unemployment exemption.  I will remove any amendment forms and manually remove any printed information about amendment.  Then mail this before May 17 with my payment for the correct amount.  I will do the same with the MI state taxes (which have not yet been submitted). 

aluna005
Level 1

Amend Federal Taxes withOUT amending state taxes

Hello,

 

Sorry to jump in this conversation, but I have a similar situation but for Child Credit increase. 

 

After the relief bill was passed my tax obligation for 2020 was reduced by 1k. I already paid the IRS because I filed prior to the relief package being passed. I  am trying to amend via TT but also keep getting stuck with having to amend State.

 

From your reply it sounds like IRS is processing refund for overpayment in May for Unemployment, are they doing the same for the Child Credit? 

DoninGA
Level 15

Amend Federal Taxes withOUT amending state taxes

@aluna005 The increase for the Child Tax Credit is effective on the 2021 tax return to be filed next year, not on the 2020 tax return.

aluna005
Level 1

Amend Federal Taxes withOUT amending state taxes

Thank you for your reply. I did read something like that on IRS.gov but it also said it can be applied to 2020. 

 

When I log into my TT account the amount due also shows the new reduced amount owed. 

 

 

Roger501
Level 3

Amend Federal Taxes withOUT amending state taxes

I was moving ahead with my 'plan' as noted above to print out my taxes to pay them now that my amount changed & I stopped payment on my original ACH payment for 4/15/21.  However, TT is says: "The following return has been transmitted. Don't file returns by mail that have already been transmitted electronically...". 

 

So, how do I now file my correct return and pay my new amount due 5/17/21? 

Roger501
Level 3

Amend Federal Taxes withOUT amending state taxes

I was moving ahead with my 'plan' as noted above to print out my taxes to pay them now that my amount changed & I stopped payment on my original ACH payment for 4/15/21. However, TT is says: "The following return has been transmitted. Don't file returns by mail that have already been transmitted electronically...".

 

So, how do I now file my correct return and pay my new amount due 5/17/21?

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