Question

My dilemma - unemployment tax credit

Forum|Forum|5 years ago
April 6, 2021
2 replies
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Filed taxes. Accepted on 3/6/2021. At that point owed Federal tax. The following week the government passes the new stimulus bill allowing for unemployment tax credit up to 10,200.00 I qualify.

My dilemma . . . turbo tax says cannot file amendment yet. So what do I do. Pay in the federal tax owed and get it back later, plus what they will now owe me

S

SweetieJean

Employee

You generally do not need to amend for Federal.

However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits, but now are eligible because the [unemployment comp] exclusion changed their income. These taxpayers may want to review their state tax returns as well.

IRS to recalculate taxes on unemployment benefits; refunds to start in May | Internal Revenue Service

See these re State:

The states still taxing unemployment benefits, despite federal relief (usatoday.com)

How is my state taxing unemployment income? (intuit.com)

Do I need to amend my state return to update my un... (intuit.com)

M

MAK70

The Internal Revenue Service announced that it will take steps to automatically refund money to people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan.

For those taxpayers who already have filed and figured their tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation and tax. Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed.