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chalet0309
Returning Member

Unemployment tax break

I have already filed and recieved my 2021 refund. I understand that there is a new tax break for those that collected unemployment. I recieved unemployment compensation that exceeded the tax free amount and opted to have no taxes withheld from my weekly payments. Of course this lowered my normal refund amount substantially, which was expected. Will I recieve any part of an additional refund since my unemployment taxes were deducted from my refund? Or is this credit only good for those who had taxes withheld from their weekly unemployment checks?

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2 Replies

Unemployment tax break

up to $10,200 will not be taxed for Federal purposes so you'll be due an additional refund. as of now not sure if the IRS will automatically adjust your return and issue an additional refund or require an amended return. at the present time, the IRS says do nothing.

https://www.irs.gov/newsroom/irs-statement-american-rescue-plan-act-of-2021 

 

 

Unemployment tax break

My professional program posted this past week that the IRS will be recomputing any already filed return with unemployment on them and adjusting the bottom line ... how long this will delay the processing of these returns is unknown.

 

If the taxpayer has already filed and got the original refund back then amending the return to make the correction may be needed... time will tell.  

 

If the taxpayer had a balance due and have not yet paid and the change will result in a refund they should not make the payment if they have not yet done so.  If the payment has been made then the IRS will adjust for this.

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