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Any idea how much and when we can expect to see our refund due to the 2020 unemployment exemption?

Adjusted Gross Income was $112,720,  Federal Taxable Income was $ 89,931.00 We adopted our only child last year so we did well on our taxes.

I made 100K even though I was off on an unpaid break for two months. My wife earned 12K in unemployment.  With 10K being non-taxable, that means only about 2K of her income is part of the above.  Roughly how much more will get refunded?

Updated 5 days ago:

According to everything I have read, there is no need to amend the return. The IRS will develop software to do that.

Updated 5 days ago:

I did my return already, and received my tax refund before the exemption was put into effect.

6 Answers

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  • 5 days ago
    Favorite Answer

    I'll assume you are married filing jointly because you didn't specify but you mentioned "we filed"

    With a taxable income of $89,931 your tax liability was $11,365. When you filed your return you applied all credits and payments against that liability and got a refund of any amount over that liability.

    With the new unemployment exemption of $10,200 your taxable income will be reduced to $79,731. Your new tax liability for the year will be reduced to $9,173. This will result in an additional refund of $2,192 (the difference between your original tax liability and your new one).

    As Wayne Z mentioned - don't hold your breath, I will probably take many months for the IRS to get through these returns and get the adjustments sent out.

    For those who don't realize what's going on here - the recent stimulus bill included a provision to make the first $10,200 worth of unemployment benefits non-taxable, and the provision is retroactive to 2020 taxes even though it wasn't passed until 2021. So the IRS said that anyone who already filed their 2020 taxes does NOT need to file an amendment. The IRS will go back through all the returns filed before this law passed and make the adjustment for anyone who had unemployment income and automatically send them whatever additional refund they get as a result.

    Marvin is in this situation - he already flied, but originally included all of his unemployment benefits in the taxable income. So the IRS is going to automatically apply the newly passed exemption and send him a refund for the difference.

  • 2 days ago

    that is correct 10,200 is not being counted.

  • 5 days ago

    It will be Summer, at least, before the IRS gets to these adjustments.

  • 5 days ago

    That depend son what was withheld.   Maybe nothing.

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  • Anonymous
    5 days ago

    If you filed your 2020 return before the unemployment exemption was a thing, you'll need to file an amended tax return.   If you don't file an amended tax return, you won't get a refund.

    If you want to know how much will be refunded, subtract $10,200 from your taxable income and then figure the tax on that amount.  Compare your prior tax liability to this.  The difference is your refund amount.

  • 5 days ago

    When?  The sooner you file, the sooner the IRS can get your refund to you.  How much?  The sooner you input all your details into a program like TurboTax, or the sooner you give your information to a tax preparer, the sooner you can find out.  We here in Yahoo are not psychic.

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