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

[patrick-rash]

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?

[xmasbaby0]

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

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

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[patrick-rash]

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]

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?  

[patrick-rash]

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]

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

[patrick-rash]

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