Unemployment tax relief

Hi @rbryantfam!

Thank you for your question!  I understand your son filed single for 2020 and received $5400 from unemployment.  I’m assuming he paid federal and state taxes on this income, did not owe any additional tax, and has not received a refund to date. 

For tax year 2020, As part of the American Rescue Plan, the first $10,200 worth of unemployment payments are now tax-free for a person with an annual modified adjusted gross income of less than $150,000. This expanded tax relief begins this year, starting for taxpayers filing returns after January 1, 2020.   

If you filed your tax return before the law was enacted then the IRS will automatically send the refund, if the adjustment did not affect other areas of your tax return.  The IRS has been making adjustments on tax returns and issuing refunds.  If you have not received your refund yet, the IRS has said that they will be sending refunds throughout the summer which doesn’t officially end until September 22nd.

If the $10,200 unemployment exclusion affects other areas of your return, for example available tax credits, then it is recommended to complete an amended return to ensure the credits are calculated properly.  I've included two links below for your reference and to assist you in completing an amendment.  The first link outlines the IRS unemployment exclusion and the second link details how to complete an amended return in TurboTax.  Of course, you can always give TurboTax a call to help you get started on the return.

Thank you again and have a great day!

https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation

https://turbotax.intuit.com/tax-tips/amend-return/how-to-file-an-amended-return-with-the-irs/L6kO691J8