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How do I amend my return to correct an ESPP federal tax overpayment?

SOLVEDby TurboTax1Updated December 10, 2021

Because of an error in a TurboTax calculation, you have reported the cost basis of your Employee Stock Purchase Plan sales incorrectly, resulting in a possible overpayment of your federal tax and, if applicable, your state tax.

We fixed the issue in TurboTax, and we want to make sure your federal and state tax returns are complete and accurate. We recommend that you check and, if necessary, amend your tax returns to determine if any additional refund is due. There are no additional fees for checking your TurboTax return or for preparing an amendment.  

We continuously strive to provide correct and accurate calculations in our TurboTax products. Sometimes that effort results in our finding errors after returns have been filed. We sincerely apologize for any inconvenience this may cause you. If you need our help, we’ve provided contact information at the bottom of this letter. 

To amend your return in TurboTax, follow the step-by-step instructions here:

  1. Write down the original refund or balance due amount(s) for your Federal and State, if applicable, income taxes. We recommend you check the paper/PDF copy of your return(s), or your banking records to verify the correct amount.
  2. Launch TurboTax and open your 2020 return.
    • NOTE: Check your refund/balance due on your federal and state returns.         
  3. Before you make any changes, select File and Save As... then add Amended 2020 return to the file name to preserve your original return.
  4. Select Online and Check for Updates. Allow the program to update if any are available.
  5. Select the Federal Taxes tab, (Personal tab if you’re using Home & Business), and then select Other Tax Situations. You may be asked to answer a few preliminary questions before you see a list of categories. Scroll down to Other Tax Forms select Start next to Amend a Return
  6. On the We’ll help you change (amend) your return screen, select Continue. Then on the Did you already file your return? screen select Yes, I have already filed my return. Then select I was contacted by TurboTax and told I may need to amend for some other reason, then select Continue
  7. On the Tell us which returns you want to amend screen, choose:
    • I want to amend both my Federal and state returns, if applicable. OR
    • I want to amend only my federal or only my state return, then check Amend my federal return. 
      Then Continue. Your federal and state, if applicable, refund/balance due tracker will usually reset to $0. This is normal.
  8. On the What do you need to change on your return? screen, scroll down to the bottom and select Done
  9. If you received unemployment, you will be asked Did you get an extra refund after you filed? select Yes or No, then select Continue.
    • NOTE: If you received the extra refund, enter the extra amount you received
  10. On the Do you still receive your mail at this address?, select Yes or No, update your address, if applicable, then select Continue
  11. On the Presidential Election Campaign, select Yes or No then select Continue.
  12. On the Special Situations on Your Amended Return, select Continue.  
  13. On the Why did you need to amend your return? enter TO CORRECT ESPP ADJUSTED COST BASIS, then select Continue.
  14. On the Let’s make sure your taxes are correct, select Continue. Review any final warnings and fix any errors. If you make any changes at this stage, be sure to run Smart Check again, until there are no new warnings to fix, then select Done
  15. Follow the TurboTax instructions to amend your state return. 
    • NOTE: You may need to manually enter information for your state amendment.
  16. On the Run Smart Check Again, select Done.
  17. Print and Save the amended return.
    • NOTE: You may be able to efile the Federal Tax Return, please follow the onscreen instructions to file the amended return.
  18. Once your tax return has printed, you need to sign, date and mail the amended return. The mailing address and refund/balance due are included on the File by Mail Instructions for your 2020 Federal Amended Tax Return and 2020 State Amended Tax Return, if applicable. Don’t forget to save a copy for your records.

We’re here to help if you have questions or need assistance. You can call us at (866) 278-9691 to reach a tax expert who is prepared to assist you with this issue. Tell the expert you’re calling about: 2020 ESPP Adjustment.

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