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emag13
New Member

why is refund less than estimated for 2020

 
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1 Reply
DavidD66
Expert Alumni

why is refund less than estimated for 2020

That is a question only the IRS can answer.  It is not unusual for the IRS to adjust a refund, and it can happen for any one (or more) of a number of reasons. 

 

One reason refunds are less than expected is called a Tax Offset.  If you owe money because of certain delinquent debts, the IRS or the Department of Treasury's Financial Management Service (FMS), which issues IRS tax refunds, can offset or reduce your federal tax refund or withhold the entire amount to satisfy the debt.

 

If you owe federal or state income taxes your refund will be offset to pay those taxes. If you had other debt such as child support or student loan debt that was submitted for offset, FMS will take as much of your refund as is needed to pay off the debt, and send it to the agency authorized to collect the debt. Any portion of your refund remaining after an offset will be refunded to you.

 

The IRS will also adjust a refund as a result of an error on the return, or a missing tax document (e.g. a 1099 or W-2).  

 

Whatever the reason, the IRS will send you a letter for explanation.

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