Should I amend to use my 2019's earned income, despite waiting for the IRS toe adjust my unemployment tax?

[jaquino91191]

Hello! I did my taxes in early Feb, and I got my refund pretty quickly. This year I didn't get much because I was getting unemployment insurance. After applying I was informed that you could use 2019's earned income to adjust my credits, however, I was advised to wait for the IRS at the time because I wasn't being allowed to amend and the IRS was adjusting people for the unemployment tax break. Now I am still waiting for the IRS to adjust the unemployment tax break/credits, however, I was wondering If I should wait for the IRS to adjust the unemployment tax break FIRST before amending and using 2019's earned income, or can I amend and adjust to change to my 2019's earned income and then the IRS adjusting when they do? Please help!

[DavidD66]

I recommend you wait on the IRS.  If you amend before the IRS makes the unemployment adjustment and sends you a refund, you may delay that, and your refund of the EIC. The IRS has said they will start sending out refunds for the unemployment income exemption in May.  According to the IRS:

The agency will do these recalculations in two phases.

• First, taxpayers who are eligible to exclude up to $10,200.
• Second, those married filing jointly who are eligible to exclude up to $20,400, and others with more complex returns.

Phase one will begin in May.  A timeline for phase two has not yet been announced.

[jaquino91191]

Are you suggesting I wait, and still amend after I receive the adjusted refund? Should I still use 2019's income after I receive it, in order to get more credits I would have earned if I did? I wasn't aware of these stipulations until after I filed my taxes in early Feb. Or do you believe the IRS will automatically adjust me for these credits despite having a higher earned income in 2019?

[ThomasM125]

@jaquino91191 You should wait for your refund before you amend your return. It is doubtful the IRS will automatically apply your 2019 income to 2020 to give you more credits, as that is optional.