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eamoncameryn
New Member

Why is TurboTax telling me to file an amended return to claim the unemployment tax credit while the irs is telling me not too?

 
4 Replies
SweetieJean
Level 15

Why is TurboTax telling me to file an amended return to claim the unemployment tax credit while the irs is telling me not too?

You generally do not need to amend for Federal.

 

However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits, but now are eligible because the [unemployment comp] exclusion changed their income.  These taxpayers may want to review their state tax returns as well.

IRS to recalculate taxes on unemployment benefits; refunds to start in May | Internal Revenue Servic...

 

But see these re State:

How is my state taxing unemployment income? (intuit.com)

Do I need to amend my state return to update my un... (intuit.com)

RayW7
Employee Tax Expert

Why is TurboTax telling me to file an amended return to claim the unemployment tax credit while the irs is telling me not too?

If this is related to the unemployment exclusion then you should wait until the IRS has updated your return before filing an amended return.  It's possible that you may only need to amend the state return.

 

The IRS has asked that taxpayers not amend for the unemployment exclusion, unless the unemployment tax break makes them newly eligible for tax benefits like the earned income tax credit.

  • If you already filed your 2020 tax return, you do not need to do anything to get these additional unemployment benefits. The IRS announced that they will automatically adjust your return and send any additional refund amount directly to you. However, some people may now be newly eligible for additional deductions and credits not already included on the original tax return. In these cases, you will likely want to amend your return to claim these additional dollars. Additional information on this is below.

-follow this link for additional information-

I need to amend my state return - TurboTax

Unemployment Stimulus: Am I Eligible for the New ...

 

 

ColeenD3
Employee Tax Expert

Why is TurboTax telling me to file an amended return to claim the unemployment tax credit while the irs is telling me not too?

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.

 

From fanfare:

 

The turbotax email/letter was misleading.

You can wait because IRS is going to adjust your refund for you , in the future.

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Critter-3
Level 15

Why is TurboTax telling me to file an amended return to claim the unemployment tax credit while the irs is telling me not too?

The email should say "MAY need to amend IF ..."  but it was poorly written and not proof read by the correct experts before it went out.  

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