Unemployment refund too high??

We received a check from the USTreasury which we assume is the unemployment tax refund for 2020. The amount is way bigger than we thought…over $3000. There was no letter explaining and the irs website and phone system got me nowhere in trying to figure out how this refund was calculated. I’d love to know how we got this much back after owing over $1000 at tax time for the first time ever (overpayment of insurance credits). I’d assume a tax break on $10,200 would be a little over $1000, not triple that! I don’t want to have to pay back part of this check if we use it.  I’m also not sure why we got a paper check when all returns, payment, and stimulus checks have been direct deposit. 

After you file

If both spouses married filing jointly collected $10,200 or more in unemployment, then the refund could be o $20,400 of unemployment not taxed.  

If you paid the $1000 due, than that may have been refunded.

The IRS will send you a notice within 30 days explaining how they determined your refund.  If there was an error, then you will also receive a notice of the amount to be repaid.

After you file

Thank you for the reply!

 

It seems odd to me that an explanation letter would be mailed separately, but I’m glad to know that’s how they do it. 

 

And yes, my husband and I are married filing jointly, but only he had unemployment income last year. Not both of us. 

Any idea how our taxes due would have been refunded? We know the amount we paid was paying back the amount of insurance credits we erroneously received for a few months. 

Thank you!! 

After you file

Here is the IRS new announcement where you can read more.

This is from the above announcement:

If the IRS adjusts someone’s tax return, the taxpayer will receive a letter within about 30 days, explaining what kind of adjustment was made and the amount of the adjustment.

I personally do not spend any refund until I am sure that it is not a mistake.  I just last week repaid $2,450 back to my state of Ohio for a mistake in money that they refunded and should not have. 

These are very unusual and strange times and I know that the federal and state workers are doing their best.  Having the law change midway through the filing season has made a stressful season even worse.  Mistakes get made and then found.  I did not expect to get a notice to send repayment, but when I did get the notice, I went through what had happened and agreed that I had received an overpayment.

Without looking at your return, I cannot tell you whether your refunded amount was correct.  I hope that the explanation letter that you receive will make everything clear to you.



After you file

Oh I absolutely agree that everyone, especially the irs workers, has been doing their best in these crazy times. I’m certainly not cut out for that work even under normal circumstances! 

 

Thank you for that link! We won’t deposit the check until we get the letter, because we can’t afford to pay it back right now. Better to not have it than to spend it and return it. 


Thanks!

After you file

Could it be for the latest 3rd Stimulus?  That is 1,400 per person.  So 2,800 for married.   Have you gotten that one?  

After you file

Yep, we got all our stimulus amounts as expected, via direct deposit.