Unemployment Exemption Refund Question

Forum|Forum|5 years ago
May 3, 2021
3 replies
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In a previous question I asked about the refund that I will be receiving after the IRS recalculates my return. According to my calculations on paper, my refund should be much higher than what is showing on my updated tax summary in TurboTax. It seems that my EITC is not being adjusted to a higher amount due to the drop in my income.

According to the reports that I am seeing, I should not be required to file an amended return to get the increase in the EITC due to my income dropping from the unemployment exemption. But I'm also seeing reports that changes in EITC due to the unemployment will require an amended return in order to get it.

I filed my return using TT and claimed the EITC prior to the unemployment exemption taking effect. Will the IRS recalculate the EITC prior to sending out the updated refunds, or will an amended return be necessary to get the difference in EITC?

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Best answer by rjs

1. Don't rely on the summaries in TurboTax. Look at the actual forms.

2. You might have to go through the EITC questions in TurboTax again to get it to recalculate.

3. There is a certain range of income in which the EITC hits a plateau. In that range, a decrease in income does not change the EITC amount. The exact range depends on filing status and the number of children.

4. It doesn't really matter what TurboTax does. The IRS is not using TurboTax to do the recalculation. Wait and see what the result of the IRS recalculation is. The refund that you actually get depends on what the IRS does, not what TurboTax does.

5. There's nothing you can do now, anyway, except wait to hear from the IRS. It might take several months, because you are one of the people with a "more complex" return.

rjs

Level 15

If you claimed the EITC on the tax return that you filed, the IRS says they will recalculate the EITC when they recalculate the unemployment exclusion. You should not file an amended return. See the following IRS announcement for details.

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

(An amended return is needed when someone did not claim the EITC on his filed return, but becomes eligible for it because of the unemployment exclusion. In that case the IRS will not automatically determine that the person is eligible for the EITC.)

ChrisGAAuthor

Level 3

The tax summary that was updated on my TT account shows that TT has recalculated the amount of my refund, but the tax summary does not list the EITC amount. The only difference I see, is that TT deducted the amount of unemployment(that I received in 2020) from my AGI, which changed my tax liability, and the amount of additional refund due would be correct if only my tax liability had changed. But the amount of EITC I have earned, due to the new reduction in my income, would reduce my tax liability by a substantial amount.

rjs

Answer

Level 15

1. Don't rely on the summaries in TurboTax. Look at the actual forms.

2. You might have to go through the EITC questions in TurboTax again to get it to recalculate.

5. There's nothing you can do now, anyway, except wait to hear from the IRS. It might take several months, because you are one of the people with a "more complex" return.

vhlokup7

Level 2

i filed single with turbo tax.when can i expect my refund.thought it was suppose to start at begging of may with single filers.thanks

DoninGA

Level 15

@vhlokup7 wrote:

i filed single with turbo tax.when can i expect my refund.thought it was suppose to start at begging of may with single filers.thanks

TurboTax receives no information from the IRS concerning tax refunds of any kind.

Go to this IRS website for information - https://www.irs.gov/newsroom/irs-begins-correcting-tax-returns-for-unemployment-compensation-income-exclusion-periodic-payments-to-be-made-may-through-summer

June231

Level 2

how much and when

xmasbaby0

Level 15

@June231 We cannot answer how much you will get for the extra unemployment refund or when you will get it.

If you are eligible for the extra refund for federal tax that was withheld from your unemployment the IRS will be sending you an additional refund sometime during the next several months. TurboTax cannot track or predict when it will be sent.

https://ttlc.intuit.com/community/tax-topics/help/how-do-i-get-the-new-unemployment-benefits-if-i-ve-already-filed-my-taxes/00/2081053

Please read this very recent news from the IRS:

https://www.irs.gov/newsroom/irs-to-recalculate-taxes-on-unemployment-benefits-refunds-to-start-in-may

https://www.irs.gov/newsroom/irs-begins-correcting-tax-returns-for-unemployment-compensation-income-exclusion-periodic-payments-to-be-made-may-through-summer

https://ttlc.intuit.com/community/tax-credits-and-deductions/help/am-i-eligible-for-a-new-credit-or-deduction-because-of-the-unemployment-income-exclusion/01/2211778

**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.**