topic American Recovery act unemployment filed but not paid yet in Deductions & credits

American Recovery act unemployment filed but not paid yet

oldraygun — Fri, 19 Mar 2021 18:31:55 GMT

I filed and submitted my 2020 taxes (but haven't paid fed or state yet) through Turbotax before the new bill was passed retroactively allowing the first $10,500 of unemployment to be non taxable. At the time of filing my unemployment income resulted in my owing aprox $1,000 each to fed and state (Oregon) whereas I usually get a refund. My plan at the time was to pay both fed and state before April 15. My question is what is my best course of action now that the new bill has passed? Should I pay the taxes as is and trust the IRS and state to adjust and send me a refund at some time in the future? Or wait and expect the fed and state to adjust my filed but not paid balances? Would they notify me when this is done? Will the state balance be affected by the fed adjustment? Thanks in advance.

Re: American Recovery act unemployment filed but not paid yet

dezynurguy — Fri, 19 Mar 2021 18:41:18 GMT

what I have heard and by now you may have too is to wait to file your tax forms if you haven't already sent them in. If you have already submitted then the IRS says they will make the adjustments to your unemployment filing or you may have to file an amended 1040X form.

Hope this helps

Re: American Recovery act unemployment filed but not paid yet

RayW7 — Fri, 19 Mar 2021 18:44:02 GMT

As soon as the IRS issues instructions on how to report newly-exempt 2020 unemployment payments, TurboTax will make the necessary updates to its programs. Until those changes are made, you have two options:

1. File now and amend your return later, after updates have been made.

2. File after IRS instructions are released and the programs have been updated.

As part of the recently passed American Rescue Plan, the first $10,200 worth of unemployment payments are now tax-free for households with annual incomes less than $150,000. This expanded tax relief begins this year, starting for taxpayers filing returns after January 1, 2020. The IRS will provide additional guidance about what you need to do to take advantage of this relief if you already filed your 2020 tax return.

If you’d like to be updated when the information becomes available, please sign up here.

Re: American Recovery act unemployment filed but not paid yet

SweetieJean — Fri, 19 Mar 2021 18:50:04 GMT

See this:

$10,200 unemployment tax break: IRS plans to automatically process refunds (msn.com)

Re: American Recovery act unemployment filed but not paid yet

SweetieJean — Fri, 19 Mar 2021 18:54:25 GMT

but State is still unknown.

Re: American Recovery act unemployment filed but not paid yet

oldraygun — Fri, 19 Mar 2021 20:56:11 GMT

My situation is that I have already "filed" my fed and state returns through Turbotax (before the bill was signed into law so I had a substantial bill because of unemployment) but I have not paid the IRS or the state of Oregon anything yet. Will Turbotax reconfigure my return to reflect the changes automatically? Or do I need to be pro active with Turbotax or the IRS to adjust my return to apply the new law? If I hadn't filed yet I would know to wait as per the IRS press release. If I had paid already I would just wait for a refund. My trouble is I can't find any advice on what to do in my "in between" situation. Thanks for all replies.

Re: American Recovery act unemployment filed but not paid yet

oldraygun — Fri, 19 Mar 2021 20:59:51 GMT

I should probably add that both my returns have been accepted so Turbotax may not be able to amend from their end.