TurboTax update to 2021 American Rescue Plan

[Skyraptor]

If you filed before the tax act went into effect and you owe taxes, then I would pay the tax bill.  The IRS has stated that they will start with easy tax returns to refund people the Unemployment refund and then go onto harder tax returns, married tax returns an so forth.  They stated that it can take all summer and I believe beyond.  If you are to get a refund after re-calculating your return then they will send you that.  But I would not miss a deadline if you owe.  They are back-logged and have been late meeting certain goals or deadlines.

[rjwest]

Thank for your recommendation to WAIT.  How long do I wait before I file an amended return?  Where's my Refund site states that its still being processed.  My correction will be more complicated than most since the advance premium tax credit was repaid (via tax return) and was used to write off income on Schedule C.

[Cbrisben]

Here we are almost one year later and still no updates on Turbo Tax for the American Rescue Plan of 2021. For those who filed after the mid-season tax revision, we need a way to incorporate a credit/refund on our 2021 tax return for the 2020 ($10,200) unemployment income that should have been treated as untaxable income.  We are told not to amend the 2020 return and that the IRS may automatically provide refunds for this change. We have not received a refund and don't want to file another year's return without this important credit.  Please help!! 

[ErnieS0]

The IRS, not TurboTax, said you should not file an amended return for 2020 if you did not claim the $10,200 unemployment exclusion on your originally filed return.

The IRS updated its frequently asked questions about this issue last month and is still saying taxpayers should wait for an IRS adjustment and letter and not file an amended return.

The exclusion was for 2020 unemployment only. There is no need to incorporate any credit/refund on your 2021 return. Unemployment received in 2021 in fully taxable for federal purposes.

IRS updates 2020 unemployment compensation exclusion FAQs

Edited 02/19/22 | 13:56 PST to change "There is no need to incorporate any credit/refund on your 2021 return."

[VolvoGirl]

@ErnieS0   At the end I think you mean  There is no need....on your 2021 return.

[Cbrisben]

Thank you for your quick response to my question. Depending on the IRS to "take care" of these refunds is more than frustrating. The bottom line is the IRS is clearly in a terrifyingly disorganized and inefficient state right now. 

Does the 2020 Turbotax software have the updates incorporated in their software to reflect the changes from the American Rescue Plan?

[DawnC]

Yes, TurboTax 2020 is updated for the American Rescue Plan, including the $10,200 unemployment exclusion.   Here is a list of the ARP changes for 2020 returns.   Some of these carryover to 2021 tax returns, like Enhanced Earned Income Credit and the Expanded Child Tax Credit.   

@Cbrisben

[Cbrisben]

It's February of 2022 and the IRS still hasn't deposited this refund for the 2020 Unemployment exclusion. Any idea how much longer will it take?? 

[AliciaP1]

If you have not received a letter or notice from the IRS yet, you can amend your return for 2020.

@Cbrisben

[Cbrisben]

thank you!

[hosituandung]

I did not count on the IRS, went ahead submitting an amended tax return last year. It was received by the IRS on April 20, 2021, now more than 10 months later the IRS still has not processed it, and now we are in the heat of another tax season

if I waited until now to amend, I may not get a response from the IRS until everyone forgets about my amended tax return

[AmyC]

If the only change was unemployment, then a delay in paying you was caused, If you had additional credits due to you, then the amended return was needed. The IRS is processing returns from last May so your return should be in the processing stage. You can check the status of your amended return. See track an amended return. You may need to verify they received your return. If you used postal tracking, that would be a good place to start. If the IRS never received it, they can't process it.

[sallypaceassociates]

They are in the process of doing   2020 refunds now - two of my clients received last Friday their direct deposit - and the return was filed 3/29/2021

A Suggestion  go onto IRS.gov web sire ands put in your refund information - ands check it daily

If paper check - they usually cut checks on a Friday

Hope this helps

[Cbrisben]

Did your clients receive direct deposits due to amending their returns or due to the IRS automatically processing refunds for those impacted by the American Rescue Act (excluding $10,200 of unemployment income)? I filed on March 9, 2021 before the tax revision was made. I'm trying to decide if I should amend with reduced unemployment income or keep waiting on the IRS to recalculate the return and deposit a new refund.  Suggestions? 

[sallypaceassociates]

Do not send an amended return - you will wait forever for refund - if direct info on return it will go into bank.

If your filing was paper - it probably hit when the pandemic  started and they were short staffed.

If you don't get refund by April - call IRS

Just keep checking your refund on the IRS site

Best advice do not send an amended return