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Level 1
posted Apr 5, 2021 2:33:11 PM

Do i have to amend my return (submitted in January) now that I qualify for the earned income credit after the new unemployment tax exemption went into effect?

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2 Best answers
Expert Alumni
Apr 5, 2021 2:46:00 PM

Yes, according to this IRS link, you will need to amend if the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return. To amend.

  1. Sign in to TurboTax.
  2. Scroll down to under Your tax returns & documents,
  3. Select Amend (change) 2020 return,
  4. Then Start amending my 2020 return.
  5. Then, select the reason you’re amending and follow the onscreen instructions.

Level 15
Apr 5, 2021 4:06:35 PM

You generally do not need to amend for Federal.

 

However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits, but now are eligible because the [unemployment comp] exclusion changed their income.  These taxpayers may want to review their state tax returns as well.

 

IRS to recalculate taxes on unemployment benefits; refunds to start in May | Internal Revenue Service

See these re State:

The states still taxing unemployment benefits, despite federal relief (usatoday.com)

How is my state taxing unemployment income? (intuit.com)

Do I need to amend my state return to update my un... (intuit.com)

2 Replies
Expert Alumni
Apr 5, 2021 2:46:00 PM

Yes, according to this IRS link, you will need to amend if the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return. To amend.

  1. Sign in to TurboTax.
  2. Scroll down to under Your tax returns & documents,
  3. Select Amend (change) 2020 return,
  4. Then Start amending my 2020 return.
  5. Then, select the reason you’re amending and follow the onscreen instructions.

Level 15
Apr 5, 2021 4:06:35 PM

You generally do not need to amend for Federal.

 

However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits, but now are eligible because the [unemployment comp] exclusion changed their income.  These taxpayers may want to review their state tax returns as well.

 

IRS to recalculate taxes on unemployment benefits; refunds to start in May | Internal Revenue Service

See these re State:

The states still taxing unemployment benefits, despite federal relief (usatoday.com)

How is my state taxing unemployment income? (intuit.com)

Do I need to amend my state return to update my un... (intuit.com)