I have not heard anything from the IRS about a refund I should be getting due to the $10,200 exclusion of my 2020 Unemployment Income. Why is that?

[danno4]

I returned my tax form in early March. Why wouldn't I just submit an amended return at this point?

[VolvoGirl]

Was the exclusion included on your tax return or did you file before it happened?  Are you waiting for your original refund or the recalculated e tax return refund?

No way to track it.  Just keep waiting.  The IRS is sending them out in batches over the summer.

See IRS news July 13, 2021

https://www.irs.gov/newsroom/irs-readies-nearly-4-million-refunds-for-unemployment-compensation-over...

See IRS article May 14, 2021

https://www.irs.gov/newsroom/irs-begins-correcting-tax-returns-for-unemployment-compensation-income-...

If you have filed early before the exclusion, the IRS will recalculate your return for the new 10,200 unemployment exemption for you. There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return.

[macuser_22]

Because of you amend before the first return has been fully processed and you receive your refund, you would have two returns in the system at the same time, causing both to be flagged for investigation, delaying everything for p to a year.

The IRS is currently automatically issuing refunds for the unemployment tax refund without amending (they tell you NOT to amend).  Those refunds are being processes in bunches that started in July and will continue through September.

[Critter-3]

1) You will get an additional federal income tax refund for the unemployment exclusion if all of the following are true.

• You reported unemployment benefits as income on your 2020 tax return, on Schedule 1 line 7.
• You did not get the unemployment exclusion on the 2020 tax return that you filed. The unemployment exclusion would appear as a negative amount on Schedule 1 line 8, with the abbreviation UCE on the dotted line to the left of the amount.
• Your tax on Form 1040 line 16 is not zero.
• Your Adjusted Gross Income (AGI), not including unemployment, is less than $150,000.

If all four of those conditions are true, The IRS will recalculate your tax return and send you an additional refund.

The IRS is still sending out refunds for the unemployment exclusion. They expect to continue through the summer. Summer ends September 22. Of course, that was just an estimate. It could end up taking longer than they expected. There is no way to tell when you will get your refund.

2) DO NOT amend your tax return. The IRS has clearly said that you should not amend unless the exclusion makes you eligible for a new credit that is not already on your tax return.

3) TurboTax does not get any information from the IRS about your additional refund for the unemployment exclusion. If you open your tax return in TurboTax you might see that TurboTax has recalculated the return to include the unemployment exclusion. But that has nothing to do with what the IRS is doing. It’s just a calculation that TurboTax makes.

Form 1040 lines 25b and 25d have nothing to do with the refund for the unemployment exclusion.

For more information see the following IRS announcements and FAQ.

IRS to recalculate taxes on unemployment benefits; refunds to start in May

IRS begins correcting tax returns for unemployment compensation income exclusion

IRS continues unemployment compensation adjustments, prepares another 1.5 million refunds

2020 Unemployment Compensation Exclusion FAQs

[danno4]

Thanks for the super-detailed response, Critter! Sounds like I need to continue to wait on the IRS to do their job like thousands of others who are probably also waiting. 

-Dan

[danno4]

Thanks for the info, Volvo Girl! Yes, I filed before the exclusion came into effect so I guess I will just have to continue to wait on the IRS (gulp). State of Oregon recalculated my taxes and sent me a sizable refund within 30 days of the new law. Go figure...

- Dan

[danno4]

Thanks for the info, macuser! Sounds like I am at the mercy of the IRS which is not a happy place to be; me and a million others... lol.

- Dan