You have calculated correctly.
1. Regarding the $2,000 credit toward the 2020 return, yes, it should be reduced by $500. This does not result in a $1,000 payment. It accurately reflects the 2019 tax refund should have been $2,500 in total.
- 2020 overpayment applied $1,000 refunded directly + $1,500 (reduced from $2,000) overpayment applied = $2,500 total 2019 amended refund
- 2019 amended return: reduced by $500: $3,000 refund - $500 payment = $2,500 total 2019 amended refund
2. No, do not add $500 to Line 16. This reports payments already made and received by the IRS. The $500 has not yet been submitted. The $500 should be listed on Line 20.
The amended return can be e-filed. But you will have to wait until Form 1040-X is available. It will take 16 weeks to process on average.
Click the link for the most recent information about when Form 1040-X will be available
