2020 unemployment compensation exclusion FAQs — Topic D: Amended return (Form 1040-X)

These updated FAQs were released to the public in Fact Sheet 2022-39 PDF, December 2, 2022.

Q1. What if I already filed my 2020 tax return? Do I need to file a Form 1040-X to amend my tax return to report the exclusion and claim any applicable credits/deductions? (updated December 2, 2022)

A1. The IRS is no longer performing automatic corrections of tax year 2020 accounts to allow the unemployment compensation exclusion for taxpayers who claimed unemployment compensation on their 2020 return.

If you are entitled to the exclusion and your account was not automatically corrected by the IRS, you may need to file an amended return to claim the exclusion and any applicable non-refundable or refundable credits impacted by the exclusion if all the following conditions apply:

• You are eligible to exclude up to $10,200 in unemployment compensation (up to $10,200 per spouse if you and your spouse file a joint return) that you reported on your 2020 return.
• You already filed your 2020 tax return without claiming the exclusion.
• The IRS did not correct your account as part of the automatic correction process.

Do not file an amended return if you already filed one to claim the 2020 unemployment compensation exclusion.

Any resulting overpayment of tax will be either refunded or applied to your other outstanding tax liabilities.

A notice confirming the changes resulting from your amended return will be sent to you when your account is corrected. Keep that notice for your records in case your tax return preparer or state department of taxation requests a copy.

Q2. Do I need to file an amended return if I live in a community property state and did not enter the correct exclusion amount on Schedule 1, line 8? (updated December 2, 2022)

A2. If you entered an exclusion amount less than what it should have been based on FAQ I'm married and live in a community property state. Am I eligible for the exclusion?, you may need to file an amended return if the IRS has not already made the correction. The IRS is no longer making automatic corrections by recalculating your exclusion amount following this guidance and adjusting your account for the difference. Refer to Q1 above to determine if you need to file an amended return.