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Ahughes45
New Member

Taxes paid refund

I recieved regular unemployment of $5790 and paid $579 in taxes on unemployment I filed my taxes before March 1, 2021 I received my refund of $1,193 then a few months later when the IRS started doing the recalculating of returns because of the new unemployment rule I recieved $173 in my Bank account but as of today I still have not recieved a letter about why I received the extra refund. Now my question is if the $5790 unemployment I recieved became nontaxable what happened to the $579 in taxes that was paid on the unemployment? 

2 Replies
SoCalGal2021
Employee Tax Expert

Taxes paid refund

Hi Ahughes45 - just like with a W2, taxes withheld on unemployment and paid the IRS aren't the end of the story.  That's what the tax return is for, all income from all sources is reviewed as well as all deductions before the actual tax is calculated.  Your taxes paid should be reported on the 1099G.

 

That isn't to say that errors could not be made.  I always advise logging into your TurboTax Account to look at the .pdf copy of your return.  You can also have TurboTax Live Support review the return with you.

 

To find out what the IRS's side of the story is, you can setup an IRS account to see what they are reported on your 2020 Account Transcript under Records. This will include additional refunds based on adjusting nontaxed unemployment income.

https://www.irs.gov/newsroom/irs-online-account-can-help-taxpayers-get-ready-to-file-their-tax-retur...

 

Armed with these, here are some Suggestions for Contacting the IRS:

The IRS telephone number is 1-800-829-1040, and they are available from 7 a.m. – 7 p.m. Monday thru Friday. The best time to call is early in the morning.
The first question the automated system will ask you is to choose your language.
Once you’ve set your language, do NOT choose Option 1 (regarding refund info). Choose option 2 for “Personal Income Tax” instead.
Next, press 1 for “form, tax history, or payment”.
Next, press 3 “for all other questions.”
Next, press 2 “for all other questions.”
When the system asks you to enter your SSN or EIN to access your account information, do NOT enter anything.
After it asks twice, you will be prompted with another menu.
Press 2 for personal or individual tax questions.
Finally, press 4 for all other inquiries. The system should then transfer you to an agent.

 

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OmM1
Employee Tax & Finance Expert

Taxes paid refund

Hello Ahughes45

 

As I understand you are concerned that while $579 was withheld from unemployment, why you got an additional refund of $173 only as against $579.

 

While finalizing your taxes for 2020, the $579 withholding was accounted along with your other tax withholding, if any, & credits and was applied towards you tax liability and you were refunded of $1193. In other words think of $579 as an on account payment and when upon filing your tax return it was determined that overall your taxes paid and credits due to you resulted in an overpayment of $1193 and it was refunded to you in the first instance.

 

When the new law became effective and IRS got time to recheck your account (tax return), IRS realized that applying new law, they should have refunded $1366, instead of $1193; hence the additional refund of $173 to you.

Hope this helps, since you have not yet received IRS letter explaining how they calculated this amount for you; you may want to get into your IRS account and check the  IRS transcript.

If this does not answer your question fully, please do not hesitate to post further on this thread,

 

 

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