Paid Taxes before Law Change on Unemployment Income

[cardinal_jake]

I paid my tax before they passed the law saying unemployment income was untaxed. I then received a refund from the IRA for the unemployment Tax since it changed my return. However, I never was refunded or credited with the amount of tax I already paid. I called the IRS and they stated they did not know how to handle people in my situation.

[conniem123]

Hello!  Yes, if you filed your tax return before the law was enacted then the IRS automatically sent you a  refund with the lower taxable income based on the unemployment compensation exclusion.  The refund you received would be the net effect of what your tax return would have looked like if filed after the American Rescue Plan.  Any tax that was withheld from your unemployment compensation was reported to you on your Form 1099G, and you would have included on your tax return, Form 1040 line 25b.

[cardinal_jake]

The problem is, the tax I already paid when I filed was not credited to me or accounted for when I received my refund for unemployment Tax Credit. I should also be refunded the tax I paid. How do I communicate that to the IRS. I spoke to a representative who stated they did not know at the time how to handle people in my situation with the recent law change.

[conniem123]

I recommend requesting a tax transcript from the IRS.  You can request online, https://www.irs.gov/individuals/get-transcript

There are different types of transcripts, you would want the Record of Account Transcript.  This transcript will reflect the original return you filed and any changes the IRS made to your return. 

You will be able to see the IRS treatment of the tax payment you made when you filed your tax return, and the refund that was later issued to you.