Can a Refund be taken on your taxes ?

[Yoheadden]

So, because of the change in Laws for 2020 on how Unemployment Compensation gets treated, my In-laws were due a refund in the amount of $2,389 last year. They received the notice in September 2021. It said they should receive payment the same way they filed their taxes(electronically) within 2-3 weeks. We knew they were running behind, so when no payment came, we didn't get worried.
In November, I called the IRS for them to investigate. After my dear MIL gave them permission to speak to me, I found out the refund was on hold because my FIL had passed in June and was the primary taxpayer. The IRS agent I spoke with said he would send in a request to have the funds released and the IRS was required to send them out within 30 days.
Sure enough, 30 days came and went, so in the beginning of Jan, I called again. I was given the same story and it would be another 30 days. When I asked this agent why it was taking so long, she told me they were very short staffed with a huge backlog. I also asked her if my MIL could just take the refund as a credit on this years taxes, but she said no, she couldn't. The reason was that you can't combine tax years.

Does anyone know if this sounds accurate?

It would seem it would help with the IRS's backlog, as well as help people get there money. This past Friday was the additional 30 days and still no refund. Looks like I'll be making another call.

 

[cathy63]

Yes, the IRS agent gave you accurate information. You have to apply the refund to your next year's taxes when you file. You can't do it after the fact.

Your MIL should file her 2021 taxes normally (she can still file MFJ since she was married for part of the year). The 2020 refund will eventually come through.

 

[Yoheadden]

Yes, the IRS agent gave you accurate information. You have to apply the refund to your next year's taxes when you file. You can't do it after the fact.

Your MIL should file her 2021 taxes normally (she can still file MFJ since she was married for part of the year). The 2020 refund will eventually come through.

Wow, thank you for the quick reply

Wouldn’t this be he next years taxes ?
The Unemployment Compensation was in 2020, so filed in 2021.
The refund was for last year, so couldn’t it be taken this year 2022 for 2021?

Sorry, just trying to wrap my head around this so I can explain it where it makes sense.

 

[Sunset]

Could only "take the refund" if at the time of doing taxes, the person had selected to apply the refund to the next year's taxes.

In theory, you could file an amended return and select leaving the refund in with the IRS to apply to the next year, however this would just mess everything up as I'm sure the amended return would not get processed until long after they finally send the refund.

 

[Yoheadden]

Could only "take the refund" if at the time of doing taxes, the person had selected to apply the refund to the next year's taxes.

In theory, you could file an amended return and select leaving the refund in with the IRS to apply to the next year, however this would just mess everything up as I'm sure the amended return would not get processed until long after they finally send the refund.

Ah, okay and this wasn’t an option at the time because they changed the way the compensation was handled, halfway through the year.
I agree, an amended return would cause more problems. I’ll just keep checking on it periodically.

Thank you for the reply

 

[cathy63]

Wow, thank you for the quick reply

Wouldn’t this be he next years taxes ?
The Unemployment Compensation was in 2020, so filed in 2021.
The refund was for last year, so couldn’t it be taken this year 2022 for 2021?

Sorry, just trying to wrap my head around this so I can explain it where it makes sense.

You filed your 2020 taxes in the spring of 2021. The return you file this year will be for your 2021 taxes.

 

[MJ]

I read on google that the IRS will pay interest on delayed refunds but I have also read conflicting information on how many days after the refund is due they will begin accumulating interest and what is the interest rate. I am still owned from 2020. I had a refund of $818 and request electronic payment refund. They they refunded me $503 a few weeks after electronically submitting my return by Oct 15, 2021 but have yet to refund the amount I EFTed as a extension payment. Maybe, I should have identified that payment as a (past due) quarterly estimate?