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boncough
Returning Member

Ticked off regarding the American Rescue Plan correction....

Originally filed taxes in March before the American Rescue plan was announced.  Eventually got a corrected Tax Return which reflected the $10000 I was paid in unemployment and was told by Turbo Tax that it would automatically be sent to the IRS and be processed in place of my originally submitted return.  Well today, July 9th, I got a letter indicating they processed my original return and not the corrected one.  They should be owing me money....instead they are saying I owe them money which needs to be paid by July 26th.    WHAT????!!!!!  What do I do now? 

 

9 Replies
VolvoGirl
Level 15

Ticked off regarding the American Rescue Plan correction....

No it doesn't work that way.  You must have misunderstood something.

 

If you have filed early before the exclusion, the IRS will recalculate your return for the new 10,200 unemployment exemption for you. There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return.

 

Just keep waiting.  The IRS is sending them out in batches over the summer.

See IRS article May 14, 2021

https://www.irs.gov/newsroom/irs-begins-correcting-tax-returns-for-unemployment-compensation-income-...

 

And see,

https://www.irs.gov/newsroom/irs-sending-more-than-2-point-8-million-refunds-to-those-who-already-pa...

 

Do you need to amend your state return?

https://ttlc.intuit.com/community/state-taxes/help/do-i-need-to-amend-my-state-return/00/2134732

 

If you didn't file early or Turbo Tax updated your return,  your unemployment compensation will be on Schedule 1 line 7.  The exclusion will be on Schedule 1 Line 8 as a negative number. The result flows to Form 1040 Line 8.

 

The IRS doesn't update Turbo Tax.  But if you log back into your Turbo Tax Account it may update and show the new refund.  But they might have stopped doing that.

 

You can log back into your return and it should automatically update your return and show you the new refund.  But the updated return won't be sent.  The IRS will adjust it for you.

xmasbaby0
Level 15

Ticked off regarding the American Rescue Plan correction....

Please explain what you mean by "eventually got a corrected tax return..."      Do you mean you sent in an amended return yourself---a Form 1040X?   The IRS does not want amended returns for the unemployment change--they  are issuing refunds without the need for a Form 1040X (which takes more than six months to process).   

 

Call the number on the computer-generated notice you received.    They have not recalculated your amounts yet---- it is going to take at least all summer before they do all of those recalculations.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Critter-3
Level 15

Ticked off regarding the American Rescue Plan correction....

No you are a bit confused ... no amended return will sent by TT ever and unless you use the amendment program to recalculate the return for the change none will be provided.

 

Once the IRS figured out what they wanted to do the finally issued instructions that no amended returns were to be  sent in and that they will be recalculating the returns themselves automatically. They did not realize that this process would take as long as it is taking and they have said it may take all summer to send all the refunds.  So all everyone can do is be patient while the IRS digs out of the deep hole congress put them in by issuing tax law changes mid March.  

boncough
Returning Member

Ticked off regarding the American Rescue Plan correction....

Hello....

Sorry that I did not explain myself well.  Originally electronically filed In March with my unemployment payments counting in my income.   Then came the American Rescue plan where the first $10200 of unemployment was exempt from counting in your income.  In May, a corrected Tax return replaced my original return on my Turbo Tax Site (not done by me but I assumed by IRS). Turbo Tax indicated that we were not to resend that corrected return...it would automatically be resent and processed by the IRS since they made the corrections.  Here we are 3-4 months later and the IRS processed the original return (where I owed money) instead of the corrected return (where they owe me money).  Money due July 26th.  By this discussion board, it appears I am not the only one in this situation.   

VolvoGirl
Level 15

Ticked off regarding the American Rescue Plan correction....

The IRS did not update your Turbo Tax account.  Turbo Tax just made the updates but didn't send it the new updated return.  The IRS will still automatically update your return for you.  You don't have to do anything.

 

Just keep waiting.  The IRS is sending them out in batches over the summer.

See IRS article May 14, 2021

https://www.irs.gov/newsroom/irs-begins-correcting-tax-returns-for-unemployment-compensation-income-...

 

And see,

https://www.irs.gov/newsroom/irs-sending-more-than-2-point-8-million-refunds-to-those-who-already-pa...

 

Do you need to amend your state return?

https://ttlc.intuit.com/community/state-taxes/help/do-i-need-to-amend-my-state-return/00/2134732

 

xmasbaby0
Level 15

Ticked off regarding the American Rescue Plan correction....

 

We are starting to see a lot of questions like yours.   Since you prepared your tax return and filed before the tax law changed for the tax on unemployment, you owed tax due and then learned you should not owe so much or might even get a refund---so you did not pay your tax due by the May 17 deadline.   Now the IRS computers are churning out notices to people who did not pay their tax due.

 

Eventually---sometime during the summer--- the IRS will recalculate the amounts of tax due or refunds for people whose returns were filed before the law changed----but it may take a few more months.

 

Call the number on the notice you received from the IRS----it will probably be hard to get through---but be tenacious.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
boncough
Returning Member

Ticked off regarding the American Rescue Plan correction....

Thanks for the info and trying to help me out.  So it was Turbo Tax who corrected my return?  The corrected one was definitely right....however I'm still confused on why the IRS then processed my original return instead of making the unemployment credit correction as I was told they would do.  Do I now pay the taxes that they incorrectly say I owe and hope to get that refunded to me along with the refund I am also entitled to with a corrected return?   

Critter-3
Level 15

Ticked off regarding the American Rescue Plan correction....

To get some refunds out faster the IRS let the computers process the original refunds because the department that handles the changes is overwhelmed with millions of returns (much more than expected) that are taking much longer than expected to process.   There is nothing you can do about this but wait sort of patiently. 

VolvoGirl
Level 15

Ticked off regarding the American Rescue Plan correction....

Turbo Tax only updated your Turbo Tax Account.  The "corrected new return"  was not sent in.  The IRS will eventually recalculate your original return on their own.   It will take awhile.  See the links I posted above.  

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