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Unemployment Tax refund

@ TrRLsR Biden signed a bill and when he did we got more stimulus money and in that bill any tax paid on unemployment we were getting back also. BUT there was a Limit on how much unemployment you received in order for that to happen.

Unemployment Tax refund

@ TrRLsR  Yes I am sure that I am getting back the taxes I paid on unemployment. I had them take a certain amount out each week and I met the guidelines given.

Unemployment Tax refund

I know that some was getting their refunds back and then they would get another refund and I was assuming it was the refund on the taxes they paid on unemployment.

rjs
Level 15
Level 15

Unemployment Tax refund


@TrRLsR wrote:

Do you know why I would owe no tax?


@TrRLsR 

 

What is on Form 1040 line 15? That's your taxable income. If 1040 line 15 is zero, you paid no income tax because you had no taxable income.


Even if you paid no income tax, you still have to pay self-employment tax if your net self-employment income was more than $432. Self-employment tax is on Schedule 2 line 4. Self-employment tax is separate from income tax. You pay self-employment tax on your self-employment income, not on your unemployment. You don't get a refund of the self-employment tax.


Part of the tax that was withheld was used to pay your self-employment tax. If your tax (Form 1040 line 16) is zero, you already got a refund of all the tax that was withheld, other than what was applied to the self-employment tax. There is no more tax left to be refunded.

 

rjs
Level 15
Level 15

Unemployment Tax refund


@flamingo1953 wrote:

any tax paid on unemployment we were getting back


@flamingo1953 

 

No, you don't get back "any tax paid on unemployment." You get back the tax you paid on up to $10,200 of unemployment income. Any unemployment over $10,200 is still taxable.


The tax that you paid on your unemployment is not the same as the tax that was withheld from your unemployment. The withholding is just an advance payment towards any tax you might have to pay. The actual tax on your unemployment, and on any other income, is calculated on your tax return.


If Form 1040 line 16 is zero, you did not actually pay any income tax on your unemployment or on anything else. You already got a refund of all the tax that was withheld. Since you didn't pay any income tax, there is nothing left to be refunded.

 

Unemployment Tax refund

@rjs  We got refunded all the tax that we had coming on our income for 2020.  As far as I know you withhold money from unemployment cause it would be the money you would have to pay in taxes so that you don't have to pay at the end of the year. With what I had withheld during the weeks I drew unemployment is what I will be getting back. We never had any taxes on our unemployment taken out, we had to withhold money each week so when the end of the year came we didn't have to pay that tax.

priebe
New Member

Unemployment Tax refund

Help!  Late to the game here. My 2020 return meets all 4 criteria for the unemployment tax refund yet I have not yet seen one.  My return was very simple, below the income threshold.  Is it time to amend?

DawnC
Employee Tax Expert

Unemployment Tax refund

There is not a ''unemployment tax refund'' for 2020.   Here is what happened.   A lot of people collected unemployment in 2020.   Unemployment income is generally taxable income.  However, in 2020, the IRS allowed the first $10,200 of unemployment compensation to be 'tax-free'.   If you filed early and did not get the tax break when you filed, the IRS adjusted those returns and refunded taxpayers without the need for an amended tax return being filed.   If you filed after they made the change, TurboTax was updated to provide the tax exclusion, so no amending is necessary.   

 

So, it is unlikely you need to amend.   If your total income was below the filing threshold, you would not have had a tax liability anyway and would have been refunded any tax withheld from your unemployment.   

 

You will need to look at your tax return and refund to determine whether or not you should be expecting anything in the way of an ''unemployment tax refund'' or if there is a need to contact them.   Look at your Form 1040 from 2020,  how much unemployment was reported as taxable income on Line 8?    Also, if you did not have federal income tax withheld from your unemployment payments, there is nothing to refund.   Were federal taxes withheld?     

 

@priebe

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Unemployment Tax refund

So I know I am due a refund for having taxes taken out of my unemployment check and here it is 2020 June and I still haven't received any thing back , I am wondering if I need to file a amended return ? I could really use that money

 

rjs
Level 15
Level 15

Unemployment Tax refund

@Dklein1 

 

There is no refund for having taxes withheld from your unemployment checks. The tax that is withheld from your unemployment is credited towards the tax on your tax return for the year.


Here it is June 2022, not 2020, but this thread, which was started nearly a year ago, is about the unemployment exclusion on 2020 federal tax returns. For 2020, up to $10,200 of unemployment compensation was excluded from federal taxable income. The law providing the exclusion was passed in 2021, after many people had already filed their 2020 tax returns. As DawnC explained in the post above yours, which you gave cheers to, the IRS automatically sent refunds to people who were entitled to the exclusion but didn't get it on their tax returns because they filed before the tax software was updated for the new law.


You should have gotten an additional refund from the IRS if all of the following are true.

 

  • You reported unemployment benefits as income on your 2020 tax return, on Schedule 1 line 7.
  • You did not get the unemployment exclusion on the 2020 tax return that you filed. The unemployment exclusion would appear as a negative amount on Schedule 1 line 8, with the abbreviation UCE on the dotted line to the left of the amount.
  • The tax on your 2020 Form 1040 line 16 is not zero.
  • Your 2020 Adjusted Gross Income (AGI), not including unemployment, is less than $150,000. In other words, Form 1040 line 11 minus Schedule 1 line 7 is less than $150,000.

 

Note that none of these four conditions has anything to do with the tax that was taken out of your unemployment checks. Also note that the unemployment exclusion applies only to unemployment benefits that you received in 2020. It does not apply to any other year.


If you have looked at your 2020 tax return and you think you should have gotten an additional refund based on the four conditions above, but you did not get it, check Your Online Account on the IRS web site to see if it says that they sent the refund to you. Also check your bank account records for 2020 and early 2021 to see if there was a deposit from the IRS. Note that the amount of the refund would be the amount by which the exclusion reduces the tax on your 2020 tax return. The refund would not be $10,200, and it would not be the amount of tax that was taken out of your unemployment checks.


The IRS has specifically said that you should not file an amended return to get the unemployment exclusion. If you are sure that you are due a refund, and you are sure that it was not sent to you, you will have to contact the IRS.

 

Unemployment Tax refund

this is posted on the IRS website - their message is 'sit tight - we are still working on these' 

 

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

 

 

also , click the link in the paragraph below which leads to more information on whether to amend the return.

 

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 11.8 million refunds totaling $14.5 billion. The IRS is now concentrating on more complex returns. 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 filing an amended return.

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