Hello @Hunoe01,
I hope you are doing well today. In your post, you stated that you had unemployment income in 2020. However, you filed your 2020 tax return early or prior to the American Rescue Plan changes. The American Rescue Plan allowed a $10,200 exclusion from taxable income for unemployment income earned during 2020.
You wanted to know if you need to refile or amend your return due to the unemployment compensation exclusion. To answer your question, it depends. The Internal Revenue Service announced that they would internally amend any returns that contained unemployment income and were filed prior to the unemployment exclusion. However, if the $10,200 unemployment income exclusion created a new tax credit/deduction on the taxpayer's return, then the taxpayer would need to prepare and file their own amended return. The link below explains the IRS scenarios listed above:
Link: https://www.irs.gov/newsroom/irs-to-recalculate-taxes-on-unemployment-benefits-refunds-to-start-in-m...
You can use Turbotax to determine if 1. If you are due an additional refund because of the unemployment income exclusion and 2. if you need to file an amended return because a new credit was created by the unemployment income exclusion.
If you use Turbotax Online, please follow the directions below:
1. Sign in to your Turbotax account at Turbotax.com.
2. On the tax home screen, scroll down to the bottom under your 2020 return filing information. There should be a link that says "Add a State." Click that link. It will reopen your original filed return.
3. Once the return is open, check your Federal and State refund amount on the Top Left portion of the Turbotax Screen. If it increased from your original refund amount, then you are due an additional refund. If is the same refund amount on your original return, then the unemployment income exclusion did not change your return.
4. To determine if a new credit was created, you will need to click "Federal" on the left hand menu.
5. Next, Click Deductions and Credits.
6. Compare the credits on this screen to your original form 1040. Check to see if any new credits appear (For Example, the Earned Income Credit, Additional Child Tax Credit, etc...) that were not on your original return.
7. If new credits do appear, you will need to amend and file your 2020 return. If no new credits appear, you will need to wait on the IRS to internally amend your return and issue you the additional refund.
Finally, if your use Turbotax Desktop, you will need to open your originally filed return/.tax file. If the amount of the refund increased, you are due an additional refund. Follow steps 4 - 7 listed above to determine if you need to amend or wait for the IRS to amend on your behalf.
I hope this helps and thanks for using Turbotax!
Taylor, Tax Attorney, 11 Years
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