Unemployment overpayment for 2020

[Markkubes]

Filed joint with wife. Wife received $9,400 in U/E benefits. Payed tax on that amount in 2020 and have not seen adjustment and additional refund for overpayment. Do I need to amend return? Filed 2020 in February 21. Thanks

[NitaK EA]

Hi @Markkubes ,

Thank you for being a part of ’Ask the Expert' Event!

To make sure I understand your question correctly:

You and spouse filed a Married Filing Joint return for 2020 where spouse’s Unemployment Benefits on the return were taxable. However, due to the passing of the American Rescue Plan on March 11, 2021 that made the first $10,200 unemployment income tax free [for households with income less than $150,000] your spouse’s UE benefits should be excluded.

Based on IRS guidance for those who filed prior to this passing you were told not to file an amended return and that the IRS will make the adjustment correct?

NitaK, EA

[Critter-3]

Did you ever use the amendment process to see if you would get any more refund from that tax law change?  It is possible they did not send you more refund because you had already gotten all you were entitled to. 

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.