IRS chief: Unemployment recipients shouldn’t file amended tax returns

IRS Commissioner Charles Rettig said Thursday that recipients of unemployment benefits in 2020 should not be submitting amended federal tax returns during this filing season.

“The people who filed should absolutely not file an amended return,” Rettig said at a hearing held by the House Ways and Means Committee’s oversight subcommittee.

The $1.9 trillion coronavirus relief package President Biden signed last week includes a provision that waives taxes on the first $10,200 in unemployment compensation that people received last year, in cases of households with income of under $150,000. The provision applies to the 2020 tax returns that people are filing this year.

Lawmakers and tax preparers had questions about whether unemployment recipients who filed their 2020 tax returns prior to the March 11 enactment of the relief package would need to file amended tax returns in order to get the tax exemption.

Rettig said he anticipates the IRS will be able to help unemployment recipients receive the tax exemption without them needing to take additional action. 

“We believe that we will that be able to handle this on our own,” he said. “We believe that we will be able to automatically issue refunds associated with the $10,200.”

Unemployment recipients who filed their returns prior to the enactment of the relief package will receive refunds initially that don’t reflect the $10,200 exemption, and then will later receive additional refunds, Rettig said.