Amending State Returns

[LParker2400]

Hello! 

My husband and I received unemployment compensation in 2020. However, we filed our tax returns for Federal and States (California & Kansas) in early February before we knew about the unemployment tax credit.   

The IRS has now amended and applied the unemployment tax credits to our 2020 Federal Tax return and we have received the adjusted refund check from the IRS.  

Now that we know our Federal Return has been corrected, we would like to submit amended state returns (for California and Kansas) that reflect the unemployment tax credits for both my husband and myself.  However, I haven't been able to figure out how to obtain a copy of our amended 2020 Federal Return from the IRS so that I can see the new AGI that they're now showing after the tax credit was applied. My understanding is that the amendments I submit to both states must reflect the same AGI that would now be on our corrected Federal return. (BTW....adding the tax credit would have been the only change made to our 2020 federal return. )

So, my question.....

Without access to our amended Federal return, can we simply amend both of our state returns (CA & KS) through our Turbo Tax account by adding our unemployment tax credit amount to those two state returns, printing them out and sending the amended returns to the individual states for processing?   

Thanks for your help! 

Thank you! 

[MelodyB]

That is a great question!  To see your new adjusted AGI, simply log into your turbotax return on a computer and the tax return will automatically adjust to reflect your new AGI.  If you look at what you originally filed and the adjustment the IRS sent you, that should be your new refund or lowered balance due.  For example, you were due a $3K  refund when you originally filed and the IRS has sent you another $1K as your unemployment adjustment.  When you open up your return again you should see the new refund is $4K.

However, 1 word of caution here, if your new refund amount, or lowered balance due doesn't match what you received from the IRS, there could be other credits that you qualify for that the IRS didn't adjust.  For example, the IRS has said that if you had the earned income tax credit on your original return and now qualify for a higher amount, they will adjust this.  But if your income was too high on your original filing and you didn't qualify for that credit they will not automatically give it to you now.  You may have to file an amended return to get this credit.

CA does not tax unemployment benefits but Kansas does.  So there is no reason to amend your CA return.

[LParker2400]

Thank you for the quick reply!  I will file an amended return with Kansas asap.  One more question regarding the CA state return........ at the end of your reply, you indicated that because CA doesn't tax unemployment benefits, there's no reason to amend our California return.   

However, in our case, it's ultimately the AGI that was reported on our federal and state returns and how that higher amount (without the unemployment tax credit factored in) affected the subsidies I received from the state  for 2020 Covered CA health coverage. 

The AGI that was reported on our 2020 Federal Return, was well over the projected income amount  I submitted on my application to Covered CA  when I applied for 2020 health coverage.  That, of course, means that the AGI reported on our CA state return was also higher than we'd anticipated.  Because all of my subsidies were funded by CA (not federal), and the AIG reported was higher , we were then required to pay back all of the subsidies for my 2020 health coverage - @$3200 - when we submitted our 2020 California return.  

So in this scenario, wouldn't we want to submit an amended return to CA that includes the unemployment tax credit because that would ultimately lower the AGI....and that's what is looked at when  subsidies for healthcare are calculated.   That means that we should then be entitled to a full refund of the subsidies from CA.  Would this be accurate? 

[MelodyB]

You are absolutely correct!  You would want to amend CA to lower the federal AGI if that is what the health coverage is based on.