![]() ![]() Last weekend, some chatter kicked up on social media that some taxpayers were spotting notices from their banks and credit unions about money that's on the way. The IRS also said it would begin issuing some refunds that week to eligible taxpayers. The IRS said May 14 that it was beginning to correct those tax returns that involved the new exclusion. Many taxpayers who filed federal income tax returns in February and early March complained in late May that they were still waiting for extra refunds relating to the change in tax treatment of a portion of jobless benefits. Some taxpayers may want to file a federal amended return, though, if they would suddenly be eligible for certain income-based tax credits not claimed on their original return, such as the Earned Income Tax Credit for their qualifying children. ![]() The IRS said it will issue extra refunds to singles first and then later this summer to those with more complicated returns. The Internal Revenue Service has said that most of those taxpayers should not file an amended federal return, as the IRS will calculate the extra refund. And they're qualified to get some money back. Those who filed in February and early March, obviously, filed their returns without the benefit of the rule change. Michigan wasn't clear up until that point on what steps residents would need to take after the federal tax rules changed suddenly when President Joe Biden signed the American Rescue Plan into law March 11. On April 27, the Michigan Department of Treasury announced that it is requesting that an amended return be submitted by taxpayers who already filed a 2020 state income tax return that did not exclude a portion of unemployment benefits from taxable income. Or if you'd like to get a few hundred dollars soon. It's worth paying attention here if you weren't sure what to do. The good news is that you won't be punished if a crook uses your name and personal information to steal a tax refund from Uncle Sam.Michigan residents who lost their jobs in 2020 and filed their state income tax returns early this year need to file an amended state return to get extra cash back from a new tax break.īut if you file that amended Michigan return, it looks like you're actually going to see some decent money soon from Michigan unlike what's turned into a long wait for many for money from the Internal Revenue Service. That's certainly the case with the unemployment compensation tax refunds. Whenever the government starts sending checks, criminals will try to get their hands on some of that money. However, check with your state to see if it has its own form. You may be able to use Form W-4V to voluntarily have federal income taxes withheld from your payments. So, to avoid a big tax bill when you file your 2021 return next year, consider having taxes withheld from any remaining unemployment payments you receive this year.Ĭontact your state unemployment office to have federal income taxes withheld from your unemployment benefits. Withholding from Unemployment CompensationĪgain, the $10,200 exemption only applies to unemployment compensation received in 2020. Don't use the corrected AGI if the IRS adjusts your 2020 return to account for the unemployment exclusion. If you use your AGI, make sure to use the AGI as originally reported on Line 11 of your 2020 Form 1040 or 1040-SR. Next year, when you try to e-file your 2021 tax return, you will have to sign and validate your electronic return by entering your prior-year AGI or your prior-year Self-Select PIN. Second, don't file an amended return to claim the additional child tax credit or earned income tax credit if you reply to a notice from the IRS stating you may be eligible for one of these credits and you're not requesting any other changes to your 2020 tax return. If you're suddenly eligible for these credits when the unemployment exemption is applied, the IRS will calculate the credit for you and include it in any overpayment. First, you don't need to file an amended return to claim the recovery rebate credit, earned income tax credit with no qualifying children, or the premium tax credit even if it wasn't claimed on your return. There are two exceptions to this general rule. ![]() (These taxpayers may want to review their state tax returns as well.) That said, most taxpayers will need to file an amended return if they didn't originally claim the tax credit, or other credits like the additional child tax credit, but now are eligible because the exclusion changed their income, according to the IRS. The IRS, for example, can adjust returns for those taxpayers who claimed the earned income tax credit and, because the exemption changed their income level, may now be eligible for an increase in the tax credit amount which may result in a larger refund. 10 Year-End Moves to Lower Your 2021 Tax Bill ![]()
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |