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So Why is IRS now writing me and saying I am to report $120.59 as interest income? When in reality I paid the IRS a total of $ !,458.00 for Federal Taxes in the yr. 2020
I didn't receive a refund from my Federal Taxes filed in the yr 2020.
According to this IRS update as of April 16th:
The IRS is now opening mail within normal timeframes. The IRS has also made significant progress in processing prior year returns. As of April 9, 2021, we had 1.5 million individual tax returns received prior to 2021 in the processing pipeline. Including current year returns, as of April 9, 2021, we had 16.2 million unprocessed individual returns in the pipeline. Unprocessed returns include those requiring correction to the Recovery Rebate Credit amount or validation of 2019 income used to figure the Earned Income Tax Credit (EITC) and Advance Child Tax Credit (ACTC). This work does not require us to correspond with taxpayers but does require special handling by an IRS employee so, in these instances, it is taking the IRS more than 21 days to issue any related refund. If, as a result, a correction is made to any RRC, EITC or ACTC claimed on the return, the IRS will send taxpayers an explanation. Taxpayers are encouraged to continue to check Where’s My Refund? for their personalized refund status and can review Tax Season Refund Frequently Asked Questions.
How long you may have to wait: The IRS understands the importance of timely processing of tax returns and refund issuance. We are processing returns received over the summer and fall in 2020 due to the extended July 15, 2020 tax filing due date. While the majority of 2019 refund returns have been processed, in some cases, we are processing tax returns that were mailed with a payment even though payment associated with these returns have been processed by the IRS. However, we are rerouting tax returns and taxpayer correspondence from locations that are behind to locations where more staff is available, and we are taking other actions to minimize any delays. Tax returns are opened in the order received. As the return is processed, it may be delayed because it has a mistake including errors concerning the Recovery Rebate Credit, is missing information, or there is suspected identity theft or fraud. If we can fix it without contacting you, we will. If we need more information or need you to verify that it was you who sent the tax return, we will write you a letter. The resolution of these issues depends on how quickly and accurately you respond, and the ability of IRS staff trained and working under social distancing requirements to complete the processing of your return.
What you should do: If you filed electronically and received an acknowledgement, you do not need to take any further action other than promptly responding to any requests for information. If you filed on paper, check Where’s my refund? If it tells you we have received your return or are processing or reviewing it, we are processing your return, but it may be under review. We’re working hard to get through the backlog. Please don’t file a second tax return or contact the IRS about the status of your return.
Which box do we report that income?
What income? Interest from the IRS?
Enter interest from the IRS like a 1099Int and put the amount in box 1.
Enter a 1099-Int under
Federal on left
Wages & Income at top
Interest and Dividends
Interest on 1099INT - Click the Start or Revisit button
What do I do if I received the letter from the IRS saying they paid me taxable interest after I already e filed my return
@Jokerzz74 Interest income is taxable, even if it is from the IRS. You should amend your tax return to add the interest income. You will see an option to amend your tax return when you log into your program, on your Tax Home page, under Your tax returns and documents. The option to amend is not yet available in TurboTax, but should be soon.
Also, if you don't amend your return, the IRS may simply send you an invoice for the additional taxes due if and when they discover the missing income.
Thank you for your answer ThomasM125. When you say turbotax should have the ability to amend soon; do you have an approximation of when
1040X Amend should be March 17, 2022 see this list
https://care-cdn.prodsupportsite.a.intuit.com/forms-availability/turbotax_fed_online_individual.html
@Jokerzz74 I contacted irs today and she said I should wait for it to process before sending an amendment or call them on 3/1 and they can add it. Sending in an amendment now can cause delay in refund.
Where did we actually obtain this interest in income, though? I didn't receive my stimulus by direct deposit, and I don't believe I've had any direct deposit of an interest payment. I have no record of a payment being issued to me. Second question in addition: I've had multiple old returns that I didn't get paid for a year or more after the IRS accepted the return -- should they have paid me interest for those returns as well? Thanks
If the IRS paid you interest it would have been added to your refund when it was deposited or on the check you got. Check your bank account for refunds. It was probably a little more than your tax return refund.
Ahh. I'm just now mailing in my 2020 return-- will they increase the amount without me needing to file anything extra? Thanks!
Probably. When you get the refund see if it's more.
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