CP21B Impacts on 2021 Tax Questions Regarding 2020 Taxable Income

[Oreo55]

I received a CP21B decreasing my tax amount for 2020.  I am unclear on how I should include this change in my 2021 taxes.  I imported my 2020 Turbotax tax info into Turbotax 2021.  I fear that all questions that use my taxable income from 1040 11b are going to be incorrect because the software doesn't know about this change.  While the IRS stated they adjusted my 1040, they did not provide me with a copy or explain what changes were made; they just indicated the amount I would be refunded.  Based on research I think this likely has to do with unemployment compensation which was originally taxable but after filing was determined to not be taxable.  Should I adjust my 1040 11b reference to remove the unemployment amount?   Is there any way to find out what the IRS used to calculate this new refund?

[AmyC · Accepted solution]

You can get a transcript of your return at Welcome to Get Transcript. However, when you go to file your return, you may need to use the original AGI to e-file. Generally, the original is still used, but not always. You may have to file using both AGIs to find the successful one. 

[Oreo55]

Thank you.  I was able to access the IRS website and the only AGI I see is the original that I submitted.  I guess I will go with that which makes it easier as that is what is imported from last year's return.  

[ZDUTCH1]

Did the same but it does not show the form with the adjusted unemployment compensation refund. It does not affect the federal tax but my Oregon state tax calls that an 'Additional Federal Tax' refund and when I add it,  it is taking tax out of the additional federal refund.  Is that how it is supposed to be? 

[JohnW152]

Here’s most likely what’s happening.

According to Federal tax liability subtraction in the 2021 Oregon Income Tax - Form OR-40 Instructions, Your federal income tax subtraction may be reduced by any 2021 federal economic stimulus payments you received in 2021.

Is this what you’re seeing?  This is actually a reduction in the subtraction amount.  In other words, there’s not a subtraction for this on your Oregon return.  

The Line 10 instructions in the Federal tax worksheet in the publication linked above state:  Enter any 2021 federal economic stimulus payments you received in 2021 plus your recovery rebate credit, if any, from Form 1040 or 1040-SR, line 30. Refer to your IRS Notice 1444-C for the amount of stimulus payments you received in 2021.

If this doesn’t appear to be what’s happening, please provide more information that might be helpful.

@ZDUTCH1