E File Amended Return for Recovery Rebate Credit - Questions

[northwoodshiker]

E File Amended Return

Hello Turbo Tax team. I need to amend my 2020 return because I missed the recovery rebate credit when I e-filed. I have 3 questions.

1. What is the deadline (last chance) to claim the 2020 recovery rebate credit by filing an amended return?

2. If I e-file the amended return can the refund be direct deposit or will a refund from amended return be by paper check, sent by mail only, regardless if the 1040X was e filed?

3. I also received unemployment  in 2020 and claimed the full amount as income when I filed 2020. When preparing the Amended return to claim recovery rebate credit Turbo Tax is adjusting my Unemployment income by -$10,200 without my asking for that to happen. This results in a lower ‘tax’ on 1040X line 6 but the lower tax on line 6 is not changing  my refund at all and the refund is just $1800 (1200 + 600) which is the Recovery Rebate I was after. I have seen the IRS publications to NOT  amend a return for the -$10,200 unemployment adjustment. Just asking if I should be concerned.

[northwoodshiker]

Hello Turbo Tax team. I need to amend my 2020 return because I missed the recovery rebate credit when I e-filed. I have 3 questions.

1. What is the deadline (last chance) to claim the 2020 recovery rebate credit by filing an amended return?

2. If I e-file the amended return can the refund be direct deposit or will a refund from amended return be by paper check, sent by mail only, regardless if the 1040X was e filed?

3. I also received unemployment  in 2020 and claimed the full amount as income when I filed 2020. When preparing the Amended return to claim recovery rebate credit Turbo Tax is adjusting my Unemployment income by -$10,200 without my asking for that to happen. This results in a lower ‘tax’ on 1040X line 6 but the lower tax on line 6 is not changing  my refund at all and the refund is just $1800 (1200 + 600) which is the Recovery Rebate I was after. I have seen the IRS publications to NOT  amend a return for the -$10,200 unemployment adjustment. Just asking if I should be concerned.

[ColeenD3]

The IRS does not want amended returns for either the unemployment exclusion or a stimulus. They are handling things on their end.

When the IRS processes a 2020 tax return claiming the credit, the IRS determines the eligibility and amount of the taxpayer’s credit based on the 2020 tax return information and the amounts of any EIP previously issued. If a taxpayer is eligible, it will be reduced by the amount of any EIPs already issued to them.

If there’s a mistake with the credit amount on Line 30 of the 1040 or 1040-SR, the IRS will calculate the correct amount, make the correction and continue processing the return. If a correction is needed, there may be a slight delay in processing the return and the IRS will send the taxpayer a letter or notice explaining any change.

Taxpayers who receive a notice saying the IRS changed the amount of their 2020 credit should read the notice. Then they should review their 2020 tax return, the requirements and the worksheet in the Form 1040 and Form 1040-SR instructions. 

Here are some common reasons the IRS corrected the credit:

• The individual was claimed as a dependent on another person’s 2020 tax return.
• The individual did not provide a Social Security number valid for employment.
• The qualifying child was age 17 or older on Jan. 1, 2020.
• Math errors relating to calculating adjusted gross income and any EIPs already received.

[northwoodshiker]

Thank you Coleen D3,

IRS publication 'Recovery Rebate Credit Frequently Asked Questions' topic G, 'Correcting issues after the 2020 tax return is filed says the following:

(QG1) "A1. If you didn't claim the credit on your original tax return, you will need to file an Amended U.S. Individual Income Tax Return, Form 1040-X. The IRS will not calculate the 2020 Recovery Rebate Credit for you if you did not enter any amount on your original tax return."

Based on the IRS publication I need to file an amended return to claim the Recovery Rebate Credit for 2020 EIP which I did not receive. If I don't ament my return I won't get it.  My situation is that I was a dependent in tax year 2019 but I was NOT a dependent in tax year 2020. I did NOT receive any EIP in 2020 from IRS and I neglected to ask for the Recovery Rebate Credit when I filed 2020. I'd now like to correct my return and ask IRS to apply the Recovery Rebate Credit. 

Can you please advise on my 3 original questions based on the IRS published information on this topic:

1 - What is the deadline (last chance) to file an amended return and claim the Recovery Rebate Credit?

2- If Credit is applied by IRS (it should per the IRS publication) will my refund be mailed by paper check even if I e-file?

3 - How do I handle the unemployment situation if I amend my return?

Thanks for your comments and help!

[Irene2805 · Accepted solution]

To answer your questions:

1 - What is the deadline (last chance) to file an amended return and claim the Recovery Rebate Credit?

• The IRS has not specified a deadline for claiming the Recovery Rebate Credit.  Presumably it would be the deadline for filling an amended 2020 return--generally, within 3 years after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later.  

2- If Credit is applied by IRS (it should per the IRS publication) will my refund be mailed by paper check even if I e-file?

• If you had a refund on your original return and it was being deposited directly into your bank account, the refund from the 1040X (including the RRR) will probably also be a direct deposit.

3 - How do I handle the unemployment situation if I amend my return?

• Do not address the unemployment on your amended return.  The IRS will adjust returns for taxpayers eligible for up to $10,200 exclusion. Payments for phase 1 are expected to start in May.

[northwoodshiker]

Thank you very much @Irene2805!

One additional question. When using TurboTax to prepare the 1040X  (so that I can ask for the RRR) the software is automatically adjusting my income -$10,200 for unemployment taxable income adjustment. Is there a way to override this and not make the software do that. All I want to amend with 1040X is add the RRR. What do you suggest I do?

[DianeW777]

Do NOT amend your return for the Recovery Rebate Credit (RRC) which reconciles the first and second stimulus payments if you do have the RRC included with your original return.  

The IRS has made it very clear by stating they do NOT want any amendments for stimulus payment changes.

• IRS Topic G: Correcting issues after 2020 return is filed 

If you believe the RRC was not part of your original return, and you do not see that worksheet as part of your tax return, then an amendment can be completed to be sure the do actually reconcile the payments for you.  Even though TurboTax is now excluding the unemployment benefit you should not be concerned about that when completing the amendment.

Likewise, they will do the adjustments for the unemployment tax benefit under the American Rescue Plan Act (ARPA).

• IRS NewsRoom

[Edited: 04/06/2021 | 8:05a PST]    @northwoodshiker 

[northwoodshiker]

Hello @DianeW777 

I'm sorry but I'm confused. The publication clearly says that if I didn't ask for the RRR on line 30 of my original 1040 that the IRS will NOT calculate a RRR for me unless I file an amended return.  Can you please help me understand why Turbo Tax team is telling me not to file an amended return but IRS says I must file amended return to claim the RRR? Thank you!

Inserted below is from IRS pub in the link you provided:

A1. If you didn't claim the credit on your original tax return, you will need to file an Amended U.S. Individual Income Tax Return, Form 1040-X. The IRS will not calculate the 2020 Recovery Rebate Credit for you if you did not enter any amount on your original tax return.

[Irene2805 · Accepted solution]

Since you didn't claim the credit on your original tax return, you will need to file an Amended U.S. Individual Income Tax Return, Form 1040-X. The IRS will not calculate the 2020 Recovery Rebate Credit for you if you did not enter any amount on your original tax return.  [2020 Recovery Rebate Credit — Topic G: Correcting issues after the 2020 tax return is filed]

Since the TurboTax software will automatically remove the first $10,200 of unemployment benefits, just let it do that.  Your records at the IRS should be updated with this information and you won't show up in their review as needing further adjustment.

[Kworrell1]

I filed a amend I thought I was owed a 600 stimulus check I was wrong I qualified for the unemployment tax refund will I still get it or will I have to wait since I filed the amend

[Loanshark29]

I took care of a sick friend for a year and a half 2020 I didn’t think I could file it 

[Jtortora70]

I had the same situation as you. I  did my 2020 return February 10th got my refund in March. I was given the wrong information about the recovery rebate and added the money on my return as if I got it for my son but I didn't my ex wife did so I amended my return May 16th. Received a direct deposit July 28th for the amount I out in my amended return. Got a CP2B notice from the IRS August 9th explaining that it was for both my unemployment rebate and the child tax rebate. Also, amended returns don't fix the unemployment taxes so it can't be addressed in your amended return anyway. Hope this helps you if you're still looking for an answer

[Jtortora70]

Correction on what you said about the unemployment part because the new adjustment isn't on the 1040X. I amended my taxes and I was on unemployment and my return was exactly the same except for the extra I  got back for the stimulus rebate I amended my taxes for. I haven't received my unemployment rebate yet and I got my return for my amended return 2 weeks ago. I was owed 1,100 and I got 1,108 90 (8.90for interest). Is anyone familiar with the IRS notice CP21B?

[sheltie80]

As of 10/09/2021 I still haven't received the $10,200 tax credit for unemployment. I was a single filer with a very easy tax file. Should I file an amended return or still wait? Thanks.

[fanfare]

You should wait.

You may have seen in the news that the US Treasury ran out of money.