My fiancee filed her 2020 tax return last year on time, but prior to the changes that were issued in regards to UCE. She received just under $10K in unemployment during 2020. The change that was made exempting unemployment income resulted in her becoming eligible for the EIC, and Form 1040X was filed. As a result of the changes that were made, the 1040X reflected these changes:
Lines 1, 3, 5: AGI reduced by the amount of UC due to change in Schedule 1
exempting up to $10,200 in unemployment compensation for 2020.
- Line 6: Tax amount reduced due to decrease on Line 5
- Line 7: Credits reduced to prevent credits from exceeding total tax
- Line 14: Due to above changes, EIC credit taken based on now meeting
income thresholds for eligibility
- Line 15: Due to above changes, child tax credit restructured and return
now includes Schedule 8812.
In July 2021, the IRS automatically issued an EFT refund for her total tax liability (Was around $200, so they refunded her that plus some interest)
Then -- the 1040X was sent to an additional reviewer for the other changes. In December 2021, the IRS issued a paper check for ONLY the EIC (Line 14 above). HOWEVER, they completely disregarded the changes resulting on Line 15 and the included Schedule 8812. As a result, the total amount of her refund is still short by $981 plus interest because with the change in AGI, the full amount of her child tax credit became refundable.
Compounding the issue -- I spent 4 hours on the phone with the IRS this morning,, In December, while she DID receive the check with the refund for the EIC, she never received the letter of explanation from the IRS on the changes that were made. According to her transcript, this was mailed on 12/20/21, but it was never received. According to the representative we spoke to this morning, there is no way to request a copy of this letter be sent again (????)
At this point, we're not sure what to do. The IRS agent said we could re-submit the 1040X again, since the chances of it being reviewed by the same reviewer are slim -- but he was not clear in how we should go about reporting that. I suspect we would have to switch over to doing things manually now, since the original return and amended return were done in TurboTax, and TT has no idea that the IRS only honored part of what was requested on the 1040X. If we were to submit a 2nd 1040X manually, I have no idea how we would attach the appropriate supporting documentation.
Any help or advice would be appreciated.
