If you owed on your original return and paid the amount in full, the refund from the exclusion adjustment will take into account the additional payment you made to your account. Will my payment also be refunded? (added June 25, 2021)Ī5. Q5.I didn't claim the exclusion for up to $10,200 when I filed my 2020 federal income tax return and I owed tax shown on my return and paid it in full, but the exclusion adjustment results in a refund. If the refund is offset to pay unpaid debts, a notice will be sent to inform you of the offset. Unpaid debts include past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or certain federal nontax debts, such as student loans. Q4. If the exclusion adjustment results in a refund, will the IRS use the refund to pay (offset) any unpaid debts I may have? (added April 29, 2021)Ī4. Yes. Please keep this notice for your records. Usually, a notice of adjustment is received within 30 days of when the correction is made. The notice will be mailed to the address we have on file for you. We will send a notice when your account is corrected for the unemployment compensation exclusion. Will the IRS send a letter or notice if they make changes to my unemployment compensation? (updated June 8, 2021)Ī3. If we don't have any bank account information for you, then we'll mail your refund to the address we have on file for you.Note: If your account is no longer valid or is closed, the bank will return your refund to the IRS and a check will be mailed to the address we have on file for you.If we have bank account information for you on file, we'll issue your refund by direct deposit to that bank account.Q2. If the exclusion adjustment results in an overpayment (refund), how will it be issued to me? (added April 29, 2021)Ī2. Any refund resulting from the exclusion adjustment will be issued to you in one of the following ways: However, the exclusion could result in an overpayment (refund) of the tax paid on the amount of excluded unemployment compensation. The exclusion from gross income is not a refundable tax credit. The American Rescue Plan Act allows eligible taxpayers to exclude up to $10,200 (up to $10,200 for each spouse if married filing jointly) from their gross income, which will likely lower the tax liability on their 2020 tax return.
These updated FAQs were released to the public in Fact Sheet 2022-21 PDF, March 23, 2022.
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