Hi Myreanne,
Thank you for posting your question in our forum!
Yes Myreanne, you would be correct in amending your 2020 tax return only if:
"Taxpayers only need to file an amended return if the recalculations make them newly eligible for additional federal tax credits or deductions not already included on their original tax return."
In your situation and as the IRS has already stated in their website post on April 8, 2021, the IRS will automatically determine the correct taxable amount of unemployment compensation. Any resulting overpayment of tax will be either refunded or applied to other taxes you may or could have owed.
The agency will do these recalculations in two phases:
- First, taxpayers who are eligible to exclude up to $10,200.
- Second, those married filing jointly who are eligible to exclude up to $20,400, and others with more complex returns.
However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits but are now eligible to claim them following the change in the tax law. Taxpayers can use the EITC Assistant to see if they qualify for this credit based upon their new taxable income amount. If they now qualify, they should consider filing an amended return to claim this money.
These taxpayers may want to review their state tax returns as well.
Please read further, should you need additional guidance:
https://www.irs.gov/newsroom/irs-will-recalculate-taxes-on-2020-unemployment-benefits-and-start-issu...
I hope this is helpful to you Myreanne!
Regards,
Alan S.
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