Turbo Tax adjusted the gross income to reflect the 10,200 unemployment, but the IRS still has not made the change nor issued the remaining refund. So now what for 2021?

[stackejantz]

We filed before the Cares Act was passed. I'm worried if we use Turbo Tax like always that we won't ever get things straighened out since the IRS has yet to change the amounts or issue our additional refund we are owed.

[xmasbaby0]

So far the IRS has issued over 11 million of those “extra” refunds for tax on unemployment.   The IRS issued the latest round of about 430,000 of these refunds on November 1, 2021.  Another round of these refunds is supposed to be issued before the end of 2021.

The IRS is recalculating refunds for people whose AGI is $150K or below and who filed before the tax law that changed the amount of unemployment that is taxable on a federal return became effective.   

The IRS began to send out the additional refund checks for tax withheld from unemployment in May.  The refunds are being sent out in batches—starting with the simplest returns first.   If you are eligible for the extra refund for federal tax that was withheld from your unemployment the IRS will be sending you an additional refund sometime during the next several months.  TurboTax cannot track or predict when it will be sent.  The IRS has not provided a way for you to track it, so all you can do is wait for the refund to arrive.

https://ttlc.intuit.com/community/tax-topics/help/how-do-i-get-the-new-unemployment-benefits-if-i-ve...

You will get an additional federal income tax refund for the unemployment exclusion if all of the following are true.

• You reported unemployment benefits as income on your 2020 tax return, on Schedule 1 line 7.
• You did not get the unemployment exclusion on the 2020 tax return that you filed. The unemployment exclusion would appear as a negative amount on Schedule 1 line 8, with the abbreviation UCE on the dotted line to the left of the amount.
• Your tax on Form 1040 line 16 is not zero.
• Your Adjusted Gross Income (AGI), not including unemployment, is less than $150,000.

[stackejantz]

Thank you so much for all of your feedback. I completely understand that the IRS has sent millions of people the refund they were due because of the timing of filing their taxes with the full unemployment amount before the Cares Act took effect. We unfortunately are just not one of those millions of people. 

I have looked a million times to make sure that I did not mess something up and that we do absolutely meet ALL of the qualifications. And to be truthful, that is not what my concern is truly about. The original federal return that I e-filed via Turbo Tax did not have the adjustment on Part 1 line 8 for -10,200 marked with UEC. This was not sent to the IRS. I know that Turbo Tax made adjustments to the software and that the returns were refigured including that deduction on Part 1 line 8 resulting in the AGI that Turbo Tax shows for our 2020 amount. However, the IRS has not made that entry on the original return that was e-filed by me via Turbo Tax. Hence, not receiving the difference in the refund as of yet. 

My question and concern is: what happens when we go to file our federal returns for 2021? Which AGI are we supposed to use, the adjusted AGI from Turbo Tax or the non-adjusted AGI that the IRS is showing? I have checked our transcripts about once a month on irs.gov and no change has been made. I may get the Christmas present of the century and they will adjust it before the end of the year, but I have no guarantee of that. I would like to know in advance what is recommended for us to do in the event that I don't receive that Christmas present of the century. I would prefer not to have my returns messed up for years to come because of this difference.

I hope that makes some bit of sense. And again, I truly appreciate your time and feedback. 🙂

[rjs]

When you e-file your 2021 tax return you use the AGI that was on the original 2020 tax return that you filed, before any adjustment.