Intuit, which makes TurboTax software, has a list of which states are recommending that you file an amended return to receive the state income tax refund on unemployment compensation. However, if you werent eligible to receive additional tax benefits predicated on your 2020 income, such as the earned income tax credit, and youre now eligible for those benefits because your 2020 taxable income is now lower due to the exclusion, you may need to file an amended federal tax return to get those additional benefits. You would be refunded the income taxes you paid on $10,200. Keep in mind, you arent going to get $10,200 refunded. The IRS will send you a notice to let you know if youre affected. As of early November, the IRS had issued more than 11.7 million refunds totaling $14.4 billion. As many as 16 million Americans might be eligible for a refund. To get that money refunded, you may not need to do anything at all. The IRS is working through the tax returns of people who filed their income taxes before Congress passed the exclusion bill, and sending tax refunds to people who are entitled to them. But what this exclusion means is, if you paid taxes on unemployment insurance benefits that you received in 2020, you can get a refund on that money, both on your federal tax return and on your state one, if your state conformed with the federal unemployment tax exclusion. 7 Ways to Pay Your Tax Bill If You Don’t Have the MoneyĬhances are, youve already paid your income taxes for 2020.
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