The additional payment will be processed and any overpayment resulting from the exclusion adjustment will be refunded when your account is corrected but can be applied to other federal or state debts you owe. If you owed on your original return and paid the amount in full, the refund from the unemployment compensation exclusion adjustment will take into account the additional payment you made to your account. Will my payment also be refunded? (updated December 2, 2022)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. If you didn’t receive or can’t find your notice, you can view your 2020 tax records in your Online Account or request that a 2020 tax account transcript be mailed to you.
Please keep this notice for your records. We mailed the notice to the address we had on file for you, usually within 30 days of when the correction was made. We sent a notice if we corrected your account for the unemployment compensation exclusion. Did the IRS send a letter or notice if they made changes to my unemployment compensation? (updated December 2, 2022)Ī3. Any resulting overpayment of tax will be either refunded or applied to your other outstanding tax liabilities. If the exclusion adjustment results in an overpayment (refund), how will it be issued to me? (updated December 2, 2022)Ī2. 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 2022-39 PDF, December 2, 2022.
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