Still waiting for the IRS refunds for unemployment compensation overpayments - What should I do?

[jskaye10]

I was on unemployment in California in 2020, and overpaid in taxes because I summitted the form before the exclusion of up to $10,200 in 2020 unemployment compensation from taxable income calculations was added.  I got an email from TurboTax in march saying I didn't need to do anything because the IRS would send me the refund during the summer, but I never received anything.  What should I do or check?

[GeorgeDenseff]

This is not official. I have friends who work for the IRS and they are trying to get these caught up by December 9.  But that has not been announced anywhere.

[xmasbaby0]

You have no issues regarding unemployment on your CA return since CA did not ever tax unemployment to begin with.   If you have not yet received that "extra" federal refund for paying tax on the first $10.200 of unemployment, be patient---it is still being worked on by the IRS.

So far the IRS has issued over 8 million of those “extra” refunds for tax on unemployment.   The IRS has not announced when the next batch will be sent out, but they are still working on them.

The IRS is recalculating refunds for people whose AGI is $150K or below and who filed before the tax law that changed the amount of unemployment that is taxable on a federal return became effective.   

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.

https://ttlc.intuit.com/community/tax-topics/help/how-do-i-get-the-new-unemployment-benefits-if-i-ve...

Please read this news from the IRS:

https://www.irs.gov/newsroom/irs-continues-unemployment-compensation-adjustments-prepares-another-1-...

[DonaldEric]

Two years now and still have not gotten my refund for unemployment compensation.  I called IRS in February 2022 and they looked up my filing and agreed I was due a refund, but it was still "being processed" and I should wait a while longer.  I have tried calling again over the last several weeks, but cannot get through to a "live" person as I get through the whole menu of options and finally get a recorded "due to high call volumes, your subject cannot be answered at this time.  Please call back on another business day".  Anyone have a secret to how to get through to a live person?

[NCperson]

@DonaldEric - suggestion: continues patience for a few more months.  The agents is unlikely to know anymore than is on the website is what I've read.  As the IRS is committed to get the backlogs under control by the end of the year, and this unemployment issue is a 2020 issue, I'd give it to the end of August before doing anything - hopefully the issue will clear by then.

Curious: which of these 3 buckets do you fall into?

1) Filed single

2) filed joint with total unemployment income under $10,200

3) filed joint with total unemployment income over $10,200

that 3rd bucket is quite complicated for the IRS to resolve while the first two are quite easy.   The issue for the 3rd bucket is the IRS does not get detail on your tax return whether there were one or two taxpayers who had unemployment.  EACH got a benefit of $10,200 but without the detail in tax return, the IRS wouldn't know how much to credit. 

here is what the IRS website states, and this is updated every week:

https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue#coll...

Status of Unemployment Compensation Exclusion Corrections: The IRS continues to review tax year 2020 returns and process corrections for taxpayers who paid taxes on unemployment compensation, to exclude the compensation from income if eligible. To date, the IRS has issued over 11.9 million refunds totaling $14.6 billion. Some taxpayers will receive refunds, while others will have the overpayment applied to taxes due or other debts. The IRS will mail a letter to affected taxpayers to inform them of the corrections, generally within 30 days from when the corrections were completed. See the 2020 Unemployment Compensation Exclusion FAQs for more information, including details on whether filing an amended return is needed.