3 Weeks ago I posted here asking if I need to file an amended return. The answer was 'no just wait' ... but today I received a bill from the IRS for the amount owed. The details are this...
I filed in February and owed $842. Before actually sending the payment, the Unemployment Compensation Exclusion of $10,200 was announced. This applied to me ... in fact, my turbo tax software automatically updated and added the full exclusion. My dollar amount at the top of the software went from owing $842 to a refund of $323. I thought maybe I'd have to file an amended return, but again the answer was 'no, just wait, the IRS will take care of it'.
Now today I received a bill from the IRS for the $842. I am certainly planning to call them on Monday, but curious what the advice from this community is.
It is taking the IRS at least six months to process amended returns, so amending your return for the unemployment tax would not be an effective way to resolve the difference between the amount owed on your original return and the recalculated amount when the IRS automatically recalculates the return. Your plan to call Monday is the best plan---there should be a number on the notice.
The IRS began to send out the additional refund checks for tax withheld from unemployment in May. The refunds are being sent out in batches—starting with the simplest returns first. 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. The IRS has not provided a way for you to track it, so all you can do is wait for the refund to arrive.
Please read this very recent news from the IRS:
good luck getting through to the IRS on its phone lines. they're swamped and taxpayers frequently don't get through. if you do get through do what they tell you. if you don't get through I would mail back the notice without a check and include a letter of explanation that states the $842 due was before the adjustment for my nontaxable portion of my unemployment compensation. taking that into account the IRS owes me a refund even without me paying the $842.
if you send it, make sure you get proof of delivery.
an amended return would have done no good. by the time the IRS got to it, they probably would have fully processed your original return and issued you the refund.
A) the original balance due was supposed to be paid at the time of filing or by 5/17/21 at the latest
B) if you did not pay then the bill was to be expected and means they have at least processed the original return which is good news ... the return now moves to the correction department
C) so if you will NOT owe when they get around to making the unemployment correction then DON'T send a payment now HOWEVER if you cannot get the IRS on the phone you can respond to the notice with a note that you disagree with the bill and mention the fact of the unemployment correction will negate this situation.