Unemployment tax break $10,200

[ae86tran]

I already filed my taxes and had to pay in because if the unemployment relief being taxed. With the $10,200 tax break will I now get money returned to me? 

[ToddL99]

Eventually, your 2020 return will be adjusted to show the recently passed exemption for unemployment compensation. Whether the IRS does that internally or you have to amend your return remains to  be seen.

As soon as the IRS (and states) issues instructions on how to report newly-exempt 2020 unemployment payments, TurboTax will make the necessary updates to its programs.

For customers who have already filed, go to: How do I get the new unemployment benefits if I’ve already filed my taxes? to sign-up for updates

[ae86tran]

The IRS has already stated to not send an amended return. So I’m hoping they return my money I paid in and hopefully give me a refund as well but we shall see. 

[DanaB27]

Correct, the IRS ask taxpayers not to file amended returns because of the $10,200 excluded unemployment. 

"For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance." Please see IRS statement American Rescue Plan Act of 2021 for details.

If your modified adjusted gross income (AGI) is less than $150,000, then you can exclude up to $10,200 of unemployment compensation paid in 2020 from your taxable income and therefore should get a refund on taxes paid when you filed your 2020 return. But for now you will have to wait on further guidance how this will happen.

[luisbetances]

has the turbotax product updated yet to calculate the unemployment tax break of 10,200 for those who have not filed yet?

[ToddL99]

The TurboTax online programs have been updated to reflect the $10,200 federal tax exemption for unemployment compensation. Updates to the desktop programs are still pending.

For customers who have not yet filed and want to get updates on the "update", see : How do I claim the new unemployment benefits in TurboTax? 

[asyac1234]

I  filed for unemployment and received my refund, but I did not update for the tax break on turbo tax

[ToddL99]

The IRS will fix this for you - you do not have to do anything.

If you already filed and did not claim the exemption for unemployment compensation, the IRS will refigure your taxes for you and send any refund that is due.

From the IRS: New Exclusion of up to $10,200 of Unemployment Compensation:  

If you have already filed your 2020 Form 1040 or 1040-SR, there is no need to file an amended return (Form 1040-X) to figure the amount of unemployment compensation to exclude. The IRS will refigure your taxes using the excluded unemployment compensation amount and adjust your account accordingly. The IRS will send any refund amount directly to you.

[memcclain66]

I am very confused about the Unemployment Tax Break. 

I filed my taxes on March 16th. (Thinking that the TurboTax software would apply the $10,200 unemployment tax break. I was wrong.)  Due to unemployment and not enough taxes were taken out, I had to pay and I did it. 

After research, I saw that TurboTax now works with the Tax Break. When I go back to my return, it now says I am eligible for an actual refund. 

Will I get that refund? Will I be refunded the money I paid? Do I need to amend my tax return?

Thanks!

[DoninGA]

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@memcclain66 wrote:

I am very confused about the Unemployment Tax Break. 

I filed my taxes on March 16th. (Thinking that the TurboTax software would apply the $10,200 unemployment tax break. I was wrong.)  Due to unemployment and not enough taxes were taken out, I had to pay and I did it. 

After research, I saw that TurboTax now works with the Tax Break. When I go back to my return, it now says I am eligible for an actual refund. 

Will I get that refund? Will I be refunded the money I paid? Do I need to amend my tax return?

Thanks!

---

The unemployment compensation exclusion update was not released as a TurboTax software update until 03/26/2021.

You do not need to amend your tax return.  The IRS will be calculating and issuing tax refunds based on the exclusion starting in May and through the summer.

Go to this IRS website for information - https://www.irs.gov/newsroom/irs-begins-correcting-tax-returns-for-unemployment-compensation-income-...

And this IRS website for exclusion FAQ's - https://www.irs.gov/newsroom/2020-unemployment-compensation-exclusion-faqs

[Critter-3]

@memcclain66 

The IRS should take the payment into consideration when they recompute the return so just be patient while they attempt to process all these returns they were not expecting to do this tax year. 

[Shawn40]

I have a question about a notice CP14. I sent in a payment for 526.00 on 3/20/2021. This check has not cleared my account. What do I do now. 

[Critter-3]

Sounds like the payment did not get to the IRS correctly ... either you mailed it to the wrong address or the payment was mailed with the return and it did not get properly deposited.

In this case I would pay the bill they mailed you and put a stop payment on the original check with your bank so if it gets found they cannot cash it.  As for any late payment penalty you may be able to get it waived by sending in a copy of the check if you have a carbon duplicate plus the stop payment order from the bank. Sadly the interest cannot be waived.  

Next time have the payment direct debited or pay the feds directly online so you have a receipt and instant confirmation of payment.