A couple of questions on amended returns:
1. I put in some dividend information (that had been erroneously left out) to amend 2019. The 1099-DIV had amounts in boxes 1a, 1b and 5. It appears the amendment only picked up 1a. Why would that be?
2. After I complete the amendment, should I go ahead and file 2020 returns because the state refund amount will be slightly off? Or file and then amend 2020 as well?
Let me know, please.
Thanks!
1. The dividends that are separately identified are taxed at different rates.
Box 1a are total ordinary dividends--are reported on Line 3b of Form 1040.
Box 1b are qualified dividends--are reported on Line 3a of Form 1040.
Box 5 are Section 199A dividends--relate to Qualified Business Income Deduction and is included on Line 13 of Form 1040 if applicable.
For more information, see: Is There a Dividend Tax? Your Guide to Taxes on Dividends - TurboTax Tax Tips & Videos
2. No, any adjustment to the state refund will be received in 2021 and 2020 would not be affected. Keep in mind that if the standard deduction was claimed in 2019, the state refund will not be taxable on the 2020 return.
A state tax refund is only taxable to the extent of the tax deduction benefit used from paying state taxes. The deduction only occurs if itemizing deductions was more beneficial than claiming the standard deduction.