amend return or not

[frank]

I filed my gd return with turbo tax and it showed the federal and state refunds she was supposed to recieve. that was feb 23. now with the new unemployment tax break her refund amounts have changed according to turbo tax. the irs website said they would refigure the return and pay the amended amount but they sent the original amount. the state said it too would refigure and send the amended amount, but not seeing it happen. anyone here have this problem or know of anyone dealing with this and how they handled it? turbo tax says not to amend in this situation. I am wondering what is the best , amend or wait and see if the irs does it for you and how long to wait before amending.

 

[Jerry1]

Unless it’s a substantial amount, I’d wait a while before I amended. Probably about 6 months. One, to give them time and two, to send it in at a time when they aren’t in the midst of tax season. Maybe more like November.

 

[cathy63]

The IRS said they will start sending out additional refunds related to unemployment taxtion in May. It's only May 1st, so it's way too soon. If she hasn't heard from them by the end of July, or if she's now eligible for EITC or the stimulus payments and wasn't before, then file an amendment. Otherwise, just sit tight.

https://www.irs.gov/newsroom/irs-to...unemployment-benefits-refunds-to-start-in-may

The first refunds are expected to be made in May and will continue into the summer.
...
For those who have already filed, the IRS will do these recalculations in two phases, starting with those taxpayers eligible for the up to $10,200 exclusion. The IRS will then adjust returns for those married filing jointly taxpayers who are eligible for the up to $20,400 exclusion and others with more complex returns.

There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return.

For example, the IRS can adjust returns for those taxpayers who claimed the Earned Income Tax Credit (EITC) and, because the exclusion changed the income level, may now be eligible for an increase in the EITC amount which may result in a larger refund. 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 exclusion changed their income.

I don't know what state you're in, but mine (California) doesn't tax unemployment at all, so there's no refiguring needed on the state side here.

 

[frank]

we are in iowa and it does tax unemploymen. she was eligible for the eic and child tax credit initially but the unemployment exemption raised both amounts.

 

[Sunset]

we are in iowa and it does tax unemploymen. she was eligible for the eic and child tax credit initially but the unemployment exemption raised both amounts.

I read earlier that the irs would calculate the non-taxable portion of the Unemployment. However, they won't recalculate other things that become eligible because of it.

So if you are going to have possible other benefits from amending the return, it's probably worth doing.

 

[frank]

I read earlier that the irs would calculate the non-taxable portion of the Unemployment. However, they won't recalculate other things that become eligible because of it.

So if you are going to have possible other benefits from amending the return, it's probably worth doing.

she is eligible for the earned income credit and child tax credit, but the adjustment would change these amounts. do you think they will recalculate and send the balance or do I need to amend?

 

[Sunset]

she is eligible for the earned income credit and child tax credit, but the adjustment would change these amounts. do you think they will recalculate and send the balance or do I need to amend?

I would be strongly tempted to wait and see what the IRS does, then if they don't do enough recalculating in your favor, you can amend the return.

They do say they will adjust EITC if you claimed them already.

Here is what they said:
https://www.irs.gov/newsroom/irs-wi...ent-benefits-and-start-issuing-refunds-in-may

 

[cathy63]

she is eligible for the earned income credit and child tax credit, but the adjustment would change these amounts. do you think they will recalculate and send the balance or do I need to amend?

Yes, the IRS is going to recalculate the amounts for credits that were already claimed and send the difference to her automatically. If you look at the quote I posted yesterday, which is from the IRS' official announcement, that's exactly what they say they are going to do.

The best thing you can do right now is wait. Filing an amended return is not going to help her get her money faster and you may instead slow things down if you give them more information to sort through and reconcile.

 

[frank]

thanks for the information.