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dex49
Level 1

TurboTax says I get a $528 refund but just received letter from IRS saying I owe $1050

I submitted my taxes back in April 2021 using TurboTax-2020 and initially it said I owed about $1,000 for taxes on my unemployment benefits.

 

A few weeks afterwards, I learned the Biden administration had waived unemployment taxes and so I logged back into TurboTax to double check, which said I would get a $528 refund. So I cancelled my IRS payment.

 

However, now in June I receive a letter saying I owe $1,050 (including $5 interest) and TurboTax still says I get a $528 refund. 

 

What gives??

1 Best answer

Accepted Solutions
Critter-3
Level 15

TurboTax says I get a $528 refund but just received letter from IRS saying I owe $1050

This issue is happening since the computer sends automated bills but they are not taking into consideration the unemployment exclusion change that has not been done yet ... so you can call the number on the notice to alert them to the correction to come and/or  respond to the notice with the same information to get the notices to stop. 

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8 Replies
VolvoGirl
Level 15

TurboTax says I get a $528 refund but just received letter from IRS saying I owe $1050

Turbo Tax doesn't update the IRS for it.  If you have filed early before the exclusion, the IRS will recalculate your return for the new 10,200 unemployment exemption for you. There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return.

 

Just keep waiting.  The IRS is sending them out in batches over the summer.

See IRS article May 14, 2021

https://www.irs.gov/newsroom/irs-begins-correcting-tax-returns-for-unemployment-compensation-income-...

 

And see,

https://www.irs.gov/newsroom/irs-sending-more-than-2-point-8-million-refunds-to-those-who-already-pa...

 

Do you need to amend your state return?

https://ttlc.intuit.com/community/state-taxes/help/do-i-need-to-amend-my-state-return/00/2134732

 

We are not sure if you should still pay the original tax due.   

dex49
Level 1

TurboTax says I get a $528 refund but just received letter from IRS saying I owe $1050

Should I pay them and then wait for a refund? They say I owe them by the end of July. 

 

Think I may have to contact the IRS directly to get confirmation..

 

Would sending the IRS printed 2020 TurboTax be a good idea? 

 

I don't want to accrue more interest or get a fine...

fanfare
Level 15

TurboTax says I get a $528 refund but just received letter from IRS saying I owe $1050

you will keep getting letters from IRS telling you to pay until IRS gets around to reconciling your account.

It could be after Labor Day.

There are 13 million pending returns that have to be checked by a person.

 

whatever you do, don't send a second tax return.

dex49
Level 1

TurboTax says I get a $528 refund but just received letter from IRS saying I owe $1050

Wow okay.  So I will be alright if I don't pay it?

 

 

Critter-3
Level 15

TurboTax says I get a $528 refund but just received letter from IRS saying I owe $1050

This issue is happening since the computer sends automated bills but they are not taking into consideration the unemployment exclusion change that has not been done yet ... so you can call the number on the notice to alert them to the correction to come and/or  respond to the notice with the same information to get the notices to stop. 

dex49
Level 1

TurboTax says I get a $528 refund but just received letter from IRS saying I owe $1050

Thank You! And thanks to everyone else who replied

ChibiLuna07
New Member

TurboTax says I get a $528 refund but just received letter from IRS saying I owe $1050

Would you happen to know what that number is? 

Critter-3
Level 15

TurboTax says I get a $528 refund but just received letter from IRS saying I owe $1050

If you got an IRS notice look at that for a contact number ... there is no one number. 

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