The IRS does not want amended returns for either the unemployment exclusion or a stimulus. They are handling things on their end.
When the IRS processes a 2020 tax return claiming the credit, the IRS determines the eligibility and amount of the taxpayer’s credit based on the 2020 tax return information and the amounts of any EIP previously issued. If a taxpayer is eligible, it will be reduced by the amount of any EIPs already issued to them.
If there’s a mistake with the credit amount on Line 30 of the 1040 or 1040-SR, the IRS will calculate the correct amount, make the correction and continue processing the return. If a correction is needed, there may be a slight delay in processing the return and the IRS will send the taxpayer a letter or notice explaining any change.
Taxpayers who receive a notice saying the IRS changed the amount of their 2020 credit should read the notice. Then they should review their 2020 tax return, the requirements and the worksheet in the Form 1040 and Form 1040-SR instructions.
Here are some common reasons the IRS corrected the credit:
- The individual was claimed as a dependent on another person’s 2020 tax return.
- The individual did not provide a Social Security number valid for employment.
- The qualifying child was age 17 or older on Jan. 1, 2020.
- Math errors relating to calculating adjusted gross income and any EIPs already received.
