2020 Unemployment Income Tax Ruling Change
The unprecedented events of the past 18 months have impacted all of us in many ways, and your tax filings are no exception. After two tax years like no other, we are hopeful to get back to some normalcy. This year after the filing of 2020 tax returns had begun, rule changes were made that could result in a different tax outcome. The IRS is in the process of updating its systems and addressing the impact on tax returns filed before the laws changed.
Tax returns that included unemployment income or the repayment of marketplace health insurance premium subsidies may be affected. The IRS is now mailing statements computing the potential changes and tax adjustments. These mailings are being sent, not because tax returns were done incorrectly but because the laws changed retroactively after-tax returns had already been completed. Amended returns were not allowed for these changes, and we were instructed to wait for the IRS to address these changes in their systems and begin their mailings.
If you receive one of these mailings, please forward it to us. We are aware of these changes and have scanned our systems to determine the clients that are impacted; we may also contact you directly in the future. There are also scenarios that the IRS systems will not be able to handle or compute correctly, so we’ll want to review their calculations to ensure you get the entire amount of any refund owed to you.