Unemployment Refund

[lanechambers10]

My 17 yr old son received unemployment during the 2020 tax year and, because it put him over some "earnings mark", he was taxed at our (parents) tax rate. Because we filed before the rescue plan, we paid his $932 tax bill by check but he should have received a +/-$900 refund since the unemployment is not taxed now. Should we amend his tax return? We cant start an IRS account for him because he has no credit card or utility bills in his name so we have no idea what is going on with his unemployment tax refund.

[drc845443]

Good afternoon,

If the only change to the tax return is the adjustment due to the exclusion of the unemployment income , then the IRS has indicated that there is no need to file an amended tax return. 

https://www.irs.gov/newsroom/irs-to-recalculate-taxes-on-unemployment-benefits-refunds-to-start-in-m...

However, if there are other consequences as a result of the adjustment for the unemployment exclusion, then the IRS recommends that you should file an amended tax return. In addition, you also need to consider if the state requires you to file an amended state tax return.

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

If you have a special circumstance that may result in another benefit, over and above the simple adjustment of the unemployment income, such as in your case, and if your state requires you to file an amended tax return, then I would suggest that you amend both the Federal and state income tax returns to claim the additional refunds.

[lanechambers10]

That is my question. Is this situation one that calls for an amended tax return being filed? We paid the $932 and the IRS cashed the check months ago. He is actually owed a refund of over $900. Does this qualify as a reason to amend his return to get the $1800 total back?

[drc845443]

Yes, I recommend amending the tax return as there seems to be some additional benefits beyond just adjusting the return for the unemployment exclusion.