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Level 2
posted Apr 6, 2021 10:52:22 AM

Refund Amount Changed

After downloading a recent TurboTax update, I noticed that my refund amount had increased from $1,699 to $2,567 even though I hadn't changed anything. Any idea what's going on and which figure might be right?

0 4 1559
4 Replies
Employee Tax Expert
Apr 6, 2021 11:12:05 AM

It depends. If you received unemployment compensation in 2020, then this could have caused your increase in refund. 

 

If your modified adjusted gross income (AGI) is less than $150,000, the American Rescue Plan enacted on March 11, 2021, excludes from income up to $10,200 of unemployment compensation paid in 2020, which means you don’t have to pay tax on unemployment compensation of up to $10,200. If you are married, each spouse receiving unemployment compensation doesn’t have to pay tax on unemployment compensation of up to $10,200. Amounts over $10,200 for each individual are still taxable. If your modified AGI is $150,000 or more, you can’t exclude any unemployment compensation. If you file Form 1040-NR, you can’t exclude any unemployment compensation for your spouse.

 

Per the IRS, you should not amend your return for an adjustment for unemployment. An adjustment will be calculated and your refund will be issued to you automatically, if you qualify. The first refunds are expected to be made in May and will continue into the summer.

 

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

New Member
Apr 6, 2021 11:14:05 AM

This happened with my mother's return as well. I am wondering if it is related to unemployment compensation. She filed just before the new stimulus bill passed, designating the first $10,200 in unemployment to be tax free. My understanding was that Turbo Tax was awaiting IRS guidelines to update and that she would have to file an amended return. I have no idea what's going on now. Trying to figure it out...

Level 1
Apr 6, 2021 11:21:31 AM

You or your mother don't need to amend your tax return because of the unemployment compensation adjustment. The IRS will increase you refund if you received unemployment compensation in 2020 without additional actions from you. 

Level 15
Apr 6, 2021 11:38:20 AM

You generally do not need to amend for Federal.

 

However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits, but now are eligible because the [unemployment comp] exclusion changed their income.  These taxpayers may want to review their state tax returns as well.

IRS to recalculate taxes on unemployment benefits; refunds to start in May | Internal Revenue Service

See these re State:

The states still taxing unemployment benefits, despite federal relief (usatoday.com)

How is my state taxing unemployment income? (intuit.com)

Do I need to amend my state return to update my un... (intuit.com)