Ohioans who paid taxes on unemployment benefits last year can get refunds

COLUMBUS, Ohio — Did you pay federal and / or state income tax on your unemployment benefits last year? You are now probably entitled to get this money back.

But at the same time the IRS worked alone To identify who should get a federal income tax refund and send the money to them, it is not as easy to get a state-level tax refund: it is up to the taxpayers of the Ohio to file an amended tax return and other documents to get the money they are owed, according to the Ohio Tax Department.

The latest federal coronavirus stimulus package, passed on March 11, waives federal income tax up to $ 10,200 in unemployment benefits for any taxpayer (or up to $ 20,400 for joint filers ) who earned less than $ 150,000 in adjusted gross income in 2020.

Theirs said it has already reimbursed varying amounts to about 2.8 million Americans who filed their taxes before the stimulus package passed. In total, about 13 million taxpayers could be eligible for a federal tax deduction on unemployment benefits last year, according to the IRS.

In Ohio, Governor Mike DeWine signed state law on March 31, declaring that anyone eligible for a federal tax deduction on their 2020 unemployment benefits is also entitled to a state-level income tax deduction.

Not everyone who overpays their taxes this way will get a refund – the money can be used to offset back taxes or other debts.

To get a state-level tax refund, eligible Ohioans must do three things, according to the Ohio Department of Taxation:

First, they have to file an amended tax return via one of the sellers approved by the state tax service. (Taxpayers can submit an amended return themselves via a printed paper form, but Tax Department spokesman Gary Gudmundson said it takes much longer – weeks, if not months – to process paper returns).

Specifically, applicants must submit an amended Ohio Tax Form IT 1040 (be sure to click on the “amended return” box at the top of the form), as well as an amended SD Form 100 for those residing in a school district to traditional tax base. . Residents of Ohio have until May 17, 2025 – four years after this year’s tax deadline – to submit an amended return.

Second, the amended return must be accompanied by a transcript of the IRS tax account showing the taxpayer’s new adjusted federal gross income. These transcriptions can be obtained via the IRS website or by calling (800) 908-9946.

The third and final requirement is to complete an Ohio Reasons and Explanation of Corrections form (also called an IT RE form) as well as a similar but separate form for school district income tax (an SD RE form) if applicable.

When asked why the state is forcing Ohioans to do all of this to get a refund, rather than managing it on their own like the IRS does, Gudmundson said in a statement that his department “Doesn’t have all the information the IRS needs easily and independently.” adjust an individual’s Federal Adjusted Gross Income with respect to unemployment benefits received in the 2020 tax year. ”

Additionally, there is no process in place for the IRS to share Ohio taxpayer information with state tax authorities, Gudmundson said. “It’s not to blame the IRS,” he said. “They find themselves in an extraordinary and unique situation that has been imposed on them in the middle of the tax season.”

Ohio, like other states, saw an unprecedented rise in jobless claims when the coronavirus crisis began in mid-March 2020, leading to ‘stay at home’ and business closure orders .

Between mid-March and the end of December, the Ohio unemployment system said it paid about $ 7.7 billion in traditional benefits, as well as $ 7.6 billion in federal special unemployment benefits in the event of a claim. pandemic, to more than 800,000 Ohioans.

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