TurboTax update to 2021 American Rescue Plan

[rjwest]

I filed my 2020 taxes before TurboTax updated their software to the American Rescue plan.   My issue is related to refunding the Advance Payment of Premium Tax Credit.  I file in April 2021 and owed $650.  With the update I am owed over $6000.  The IRS shows it was processed on 8/2/21, but I have not received the refund (Direct Deposit).  You are the first "expert" to advise not to wait and file an amended return regarding tax payers who included Unemployment Income below $10,000.   Do you recommend I also now file an amended return?  

[Cynthiad66]

Do Not File an Amended Return.  The IRS has a backlog of work for various reasons.  The Amendment would just ad to the confusion and cause further delay.  It is a long time, but being patient is the best course of action here. TurboTax has been update for all of the American Rescue Plan and the system is working but IRS will need a little more time.

@rjwest

[Fedexgunot]

Hi, Jeremy from Colorado here.

I filled my 2020 return in February of last year,  I received a notice CP05A audit for my federal return in September the 31st being the deadline and had to fax copies of all w2 and 1099g to them which I did by September 20th or around there,  I then received my federal refund by November 4th and there has been no sign of my overpayment of $10,872 Unemployment wages or approximately $1500 in taxes... with refund calculation says I'm owed around 800. I feel has been a legitimate reason to amend am I Right? Also I am in Colorado which I hear has no state tax break so I will only need to file a federal correct? Appreciate any assistance 

[JulieS]

Yes, you have a legitimate reason to amend your 2020. I am surprised that the IRS didn't take this change into account when your return was audited. 

You are correct that you don't have to amend your state return, if the refund or tax due doesn't change.

@Fedexgunot 

[rjwest]

Hello Cynthiad66,

Thank you for your above reply regarding your advise to be patient.  Unfortunately, I have not received the refund, the IRS portal no longer identifies me in "where's my refund," and have not been able to contact the IRS by phone.  Is the IRS still dealing with a backlog from 2020 or should I assume I fell through the cracks and should finally submit an amended return? 

[NCperson]

@rjwest - they are still dealing with 2020: 

did you try and review your transcript at IRS.GOV to see if there is anything in there that would give you a clue? did you efile or paper file and approx what date? 

https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue#coll...

As of May 27, 2022, we had 10.2 million unprocessed individual returns which include returns received before 2022, and new tax year 2021 returns. Of these, 2 million returns require error correction or other special handling, and 8.2 million are paper returns waiting to be reviewed and processed. This work does not typically require us to correspond with taxpayers but does require special handling by an IRS employee so, in these instances, it is taking the IRS more than 21 days to issue any related refund and in some cases this work could take 90 to 120 days. If a correction is made to any Recovery Rebate Credit, Child Tax Credit, Earned Income Tax Credit or Additional Child Tax Credit claimed on the return, the IRS will send taxpayers an explanation.

[rjwest]

Thanks for your reply/help.  I filed electronically on 3/30/2021.  I reviewed my transcript just now and the numbers are what I originally filed.  The transcript also shows that the return was "processed" on 8/2/21.   I wish the IRS would give me some indication that it is being revised.  If I amend at least I will have a piece of mind that it is being re-processed.  How much harm could it possible cause given that it is all done electronically?  

[Mike9241]

I don't believe Turbotax allows e-filing of 2020 amended returns.  

[NCperson]

@rjwest - if you filed electronically, it was accepted. the IRS has it.  you would have to file via paper, which the IRS has pleaded people NOT to do; it'll sit with the IRS for 6-9 months on any event.

1) have you looked at your transcript on IRS.gov to see if there is any indication of anythimg?

2) although extremely difficult to get through, have you tried calling? 

[rjwest]

Thanks again for your insight.  I have looked over the transcript and there is no indication that any revisions or changes since I first looked in January.  I will try to call the IRS again.  Perhaps they could tell me at what point I amend the return via paper  

[fanfare]

@rjwest 

 you can now select 2020 on the "Where's my Refund" status page at IRS.gov

If it shows your refund without adjustment for the 10,200 exclusion, then IRS is still working on adjusting your refund. OR, you are not eligible.

Update:

[  After so long, if you amend 2020 tax return with 1040-X to make that adjustment yourself, it can't be any worse than it is now. You will have to file on paper, expect at least nine months for an amended return to go through.

currently, 2.1 million amended returns ahead of you. ]

[rjwest]

Thanks for your insight.  "Where's my refund?" states that the information I entered is wrong, likely because I my original return shows me owing while the revisions will give me the refund.  I entered all combinations without success.   According to TurboTax and my research, they do indeed owe me a refund.   The Where's my refund problem indicates that their processes might be faulty.   I will attempt to call for the next couple of months and if unsuccessful will amend the 2020 return.  

[fanfare]

There's no reason to wait two months.

The IRS call center service is not going to improve soon.

@rjwest 

[NCperson]

@fanfare - per the IRS, do not call at this time  - that is their instructions - it otherwise just makes the situation worse

https://www.irs.gov/newsroom/2020-unemployment-compensation-exclusion-faqs

For additional information about this exclusion, refer to the frequently asked questions on this page. Please do not call the IRS. IRS phone assistors don't have additional information beyond what's available on IRS.gov.

further: do not send in an amendment: 

https://www.irs.gov/pub/taxpros/fs-2022-21.pdf

Q1. What if I already filed my 2020 tax return? Do I need to file a Form 1040-X to amend my tax return to report the exclusion? (updated March 23, 2022)
A1. Unless you're entitled to a credit or deduction you didn’t claim on the 2020 tax return you already filed as described in Topic E, there's generally no need to file an amended return (Form 1040-X) to report the amount of unemployment compensation received in tax year 2020 to exclude on your 2020 tax return. The IRS began performing the corrections starting in May 2021 and continues to review tax year 2020 returns and process corrections to issue any applicable refund that is due

[fanfare]

@NCperson 

You should be addressing your information to  @rjwest 

since they are the one who is waiting and concerned about the delay.