Taxes withheld from Unemployment Benefits.

[ChrisGA]

I elected to have Federal taxes withheld for the unemployment benefits that I received in 2020. I received less than the 10,200 limit, but a substantial amount of Federal taxes were withheld from those benefits.

How will Federal taxes that were withheld from unemployment benefits be treated in light of the 10,200 unemployment exclusion, when the IRS recalculates any additional refunds that may be owed to an individual?

[ee-ea]

See this from the IRS    https://www.irs.gov/newsroom/irs-to-recalculate-taxes-on-unemployment-benefits-refunds-to-start-in-m...

and this FAQ

https://ttlc.intuit.com/community/state-taxes/help/do-i-need-to-amend-my-state-return/00/2134732

[rjs]

The amount of tax that was withheld from your unemployment is not affected by the $10,200 exclusion. If you already filed your tax return, and entered the tax withheld as shown on your 1099-G, that withheld tax was already applied towards the total tax on your tax return.

The recalculation for the exclusion changes your income and your tax, but it does not change the amount of tax that was withheld. The amount that was withheld from your unemployment was added to the tax withheld from your pay or any other withholding that you had. The total of all the tax that was withheld anywhere was applied to the total tax on your tax return. Withholding from unemployment is treated the same as withholding from pay or from any other income.

You will still get any additional refund that results from the recalculation for the exclusion.

[ChrisGA]

I just checked my TT return again, and it seems that TT re-calculated my return to reflect the removal of the Unemployment income I received in 2020. However, the amount of federal tax that was withheld from my Unemployment income is now missing from the line regarding 1099 tax withheld, rendering my new refund total incorrect, hence the reason for my original question. It's like the 1099 section was completely removed from my return.

[VolvoGirl]

Did you file yet or are you still working on it?  Did you file before the exclusion?  And the withholding is not on line 25b?

[ChrisGA]

I filed in Feb., before the unemployment exclusion was in effect. I have already received my original refund amount via direct deposit in early March.

Everything on the updated return is correct with the exception of the amount of federal taxes that were withheld from my unemployment income.

I'm just a stickler for accurate records, and I'm left wondering which return I should actually download and keep for my records. The amount of return I should be getting after the unemployment exclusion is inaccurate at this point due to the Federal taxes withheld from my unemployment not being listed on this newly updated TT return.

[VolvoGirl]

@rjs  please ask a moderator to look at this one.  Haven't heard of the withholding changing.  

[rjs]

---

@ChrisGA wrote:

it seems that TT re-calculated my return to reflect the removal of the Unemployment income

---

@ChrisGA  The recalculation for the unemployment exclusion doesn't remove the unemployment income. It adds the exclusion as a negative amount on Schedule 1 line 8. The unemployment income should still be on Schedule 1 line 7. When you look at Schedule 1 in TurboTax, is the unemployment income on line 7 and the exclusion on line 8? In your case they would be the same amount, since you received less than $10,200.

Go back to the Unemployment topic in the interview. Is your 1099-G information still there?

Are you using TurboTax Online or the CD/Download TurboTax software?

[ChrisGA]

No, nothing is on any line in the additional income section where the unemployment income from my 1099-G was reported on my original return. The weird thing is, is that my AGI is correct if you deduct the amount of UI I received, but I see no indication of how the math was done to remove it.

[rjs]

@ChrisGA 

As VolvoGirl said, we have not heard of anyone else having their 1099-G completely deleted as a result of the recalculation. Is it possible that you have more than one TurboTax Online account, and you are not looking at the same account that you actually filed from? It's very common for people to have more than one account, often without even realizing it. Did you at any time do a preliminary or what-if return in a different account, perhaps early in the filing season?

Please follow the instructions in the FAQ at the following link to get a list of all your accounts. If you have more than one email address, do it for each address. Then sign in to each one of your accounts and see if your correct tax return is there. Before you start this procedure, make sure you are signed out of all your accounts, including the one you are using here in the Community. You can access the FAQ without being signed in.

How many Intuit Accounts do I have with TurboTax?