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patrick-rash
Returning Member

Just got a letter saying I owe a balance based on the revised unemployment tax refund under the American Rescue Plan - why?

I claimed $12,600 in unemployment benefits on my 2020 taxes and I just got a letter from the state of california tax board saying I owe a balance after the revised return. How can that be possible?

It says based on the amount that they could verify with the EDD. If I already paid taxes on $12,600 how could I owe a balance with them taking away over 10K of it as taxable?
6 Replies
xmasbaby0
Level 15

Just got a letter saying I owe a balance based on the revised unemployment tax refund under the American Rescue Plan - why?

Something else is going on, since CA does not tax unemployment at all---not even before the  federal tax law changed.

 

 

I RECEIVED A LETTER FROM THE IRS/STATE

 

 

TurboTax does not receive any information from the IRS or your state after your return was filed, so no one at TurboTax knows about a letter you received from the IRS or the state.

 

(what the letters from the IRS mean)

I GOT A LETTER FROM THE IRS   

https://ttlc.intuit.com/questions/3605673-i-got-a-letter-or-notice-from-the-irs

 

 

I AM BEING AUDITED

If you purchased Audit Defense:

https://ttlc.intuit.com/questions/2924451-i-bought-max-or-audit-defense-and-now-i-m-being-audited

 

AUDIT SUPPORT

 

TurboTax has a special phone number for help with IRS/state tax letters, which will be easier than going through regular Customer Support.   At the page below, click on the blue button that says "Get Help from TurboTax Support".  Then it will ask you what tax year is your letter.  Then it will ask you what the letter concerns. Then it will show you the phone number during posted business hours.

https://support.turbotax.intuit.com/irs-notice/audit-support/

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
patrick-rash
Returning Member

Just got a letter saying I owe a balance based on the revised unemployment tax refund under the American Rescue Plan - why?

Thats what I thought but the explanation says "The witholding claimed on your return has been revised to the amount that we could verify with the EDD. We also considered any W-2s and Forms 1009 reporting withholding that you provided with your tax return. If you have any documentation supporting the original amount of witholding claimed please contact us."

 

I didnt have any taxes taken out of the unemployment when I was receiving it and claimed the full amount of 12,600 on my taxes. What withholding could they be talking about? 

xmasbaby0
Level 15

Just got a letter saying I owe a balance based on the revised unemployment tax refund under the American Rescue Plan - why?

Did you have any other income that was reported on a W-2 or any sort of 1099 (there are over a dozen kinds of 1099's)  ????

 

When you entered your 1099G on your federal return did you say tax had been withheld from it?  

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
patrick-rash
Returning Member

Just got a letter saying I owe a balance based on the revised unemployment tax refund under the American Rescue Plan - why?

I had a traditional W-2 with taxes withheld and a Schedule C 1099 with no taxes withheld. I paid those taxes when I filed my return.

 

This balance specifically comes from the revised amount from EDD. I claimed 12,600 in UI income with no taxes withheld (my 1099G) and would have paid taxes owed at the time of filing.

 

Now I seem to owe a balance of $708 based on what they could verify from EDD which doesnt make any sense. Unless somehow EDD gave them the wrong number and it was somehow higher. Also like you said California doesnt tax UI and this letter is from the State of California Tax Board. So why would they be saying there is a balance based on my UI claim? 

Critter-3
Level 15

Just got a letter saying I owe a balance based on the revised unemployment tax refund under the American Rescue Plan - why?

Contact the state .. use the number on the notice and get to the bottom of this issue. 

patrick-rash
Returning Member

Just got a letter saying I owe a balance based on the revised unemployment tax refund under the American Rescue Plan - why?

Thats the plan - office is closed for the day. Wanted to see if this happened to anyone else! 

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