Does anyone know if you need to amend previous tax returns to claim the FFCRA credit? The notice I got wasn't clear about the process - it just directs me to that Adesso360 portal but doesn't explain if this affects my already-filed returns.

I was in a similar situation and found that the best approach is to cross-reference multiple sources before taking any action. When I got my FFCRA notice, I first checked if the sender address matched official IRS correspondence (it should come from the Department of Treasury, not a third-party company directly). The timing issue that others mentioned is actually not that unusual - the IRS has been doing targeted outreach to employers who may have missed claiming these credits during the original periods. They're using third-party contractors like Adesso360 to help process the backlog of potential claims. However, I'd strongly recommend never clicking links in the letter or going directly to any portal mentioned. Instead, go to IRS.gov and search for "FFCRA tax credit" to find the official information and legitimate pathways to claim any credits you're entitled to. If you determine you do qualify, you can work through official IRS channels rather than risking your personal information with a potentially compromised portal. The peace of mind from verifying through official channels is worth the extra time, especially when dealing with something as sensitive as tax information.

Quick question - does anyone know if the returned earnings portion of the excess contribution is subject to the 10% early withdrawal penalty if you're under 59½? My plan administrator told me it might be, but I'm getting conflicting information.

This is a really complex situation that trips up a lot of people! I went through something similar last year and want to add a few practical tips based on my experience: 1. Get everything in writing from HR - specifically the date they're processing the correction and confirmation about the W-2 correction that Zainab mentioned. My HR initially said "early 2025" which wasn't specific enough to determine if it fell within the 2.5 month window. 2. The 1099-R you receive will be key - it should have distribution code "8" in Box 7 for excess contributions returned due to failed ADP/ACP tests. Make sure to keep this with your tax records. 3. Don't forget that if you're getting earnings returned too (which is common), those earnings are taxable as ordinary income for the year being corrected (2024 if done by March 15, 2025). The earnings portion may also be subject to the 10% penalty if you're under 59½. 4. Consider talking to a tax professional if the amounts are significant. The interaction between the returned contributions, earnings, and how they affect your tax liability can get pretty complex, especially if you're near certain income thresholds for other tax benefits. The 2.5 month rule is real and it's specifically in the IRS regulations for 401(k) plan corrections. Your HR person is correct about the timing impact on which tax year is affected.

Has anyone here had experience with the IRS Fresh Start program? I've heard it can help if you owe taxes but are having financial difficulties. Maybe that's another option for OP?

I had this exact same error message when I tried to set up my installment plan in 2022! It's so frustrating when the system just gives you that vague "unable to complete transaction" message with no real explanation. In my case, it turned out to be a combination of things - my return was still being processed even though I got the acknowledgment, AND I had made a small math error on one of my forms that created a mismatch in their system. The error was tiny (like a $50 difference) but it was enough to trigger that rejection. What finally worked for me was waiting about 3 weeks after filing, then trying the online system again. By then my return had fully processed and the system recognized everything properly. If you're still getting the error after waiting, definitely try the paper Form 9465 route - sometimes the manual processing can handle situations that the automated system can't. Also, don't panic about the penalties! They're really not that bad compared to other debt, and the IRS is generally pretty reasonable about working with people who are making good faith efforts to pay. You're doing the right thing by trying to set up a payment plan instead of just ignoring it.

So if I'm reading this right, Fiverr actually handles all the tax reporting stuff for the transactions on their platform? I've been avoiding using freelancers for my hobby projects because I was worried about tax paperwork. This is a huge relief!

This is exactly the kind of confusion that trips up so many people! Your buddy means well, but he's mixing up business and personal tax rules. As everyone else has confirmed, you're totally in the clear here. The 1099-NEC requirement only kicks in when you're operating a business and paying contractors for business services. Since you commissioned this artwork for personal use (not for a business), you have zero tax reporting obligations - even though it was over $600. Plus, since you used Fiverr, the platform handles all the tax reporting anyway. They're the ones who pay the artist (minus their fee), so they're responsible for any necessary tax forms. You're just a customer making a purchase. Your situation is super common - I see this question pop up a lot during tax season. People get nervous when they hear "$600" and "1099" in the same sentence, but those rules really only apply to business expenses.

Listen, don't bother waiting for that letter. It could take weeks and even then won't have all the info you need. I spent HOURS on the phone trying to get answers about my offset earlier this year. Finally used Claimyr (claimyr.com) and got connected to an actual person at Michigan Treasury in under 30 minutes. They explained exactly what the debt was for and I was able to dispute it right then and there. Talking to an agent directly got my issue resolved in one call instead of weeks of back and forth. Never going back to the old way of dealing with tax issues again.

I went through this exact same situation with Michigan Treasury about 6 months ago. The waiting is the worst part because you have no idea what they're claiming you owe or how much they took from your refund. In my case, it turned out to be an old unemployment overpayment from 2020 that I had completely forgotten about. The letter took almost 3 weeks to arrive, and by then I was stressed out of my mind thinking it was some huge debt. My advice would be to try calling them directly at 517-636-4486 if you can't stand waiting. Yes, you'll probably be on hold for a while, but at least you'll get answers. Have your SSN and tax return info ready when you call. The good news is that if it turns out to be a legitimate debt you forgot about, most agencies will work with you on payment plans. And if it's an error (which does happen), you can dispute it once you know what agency is claiming the debt. The uncertainty is definitely the hardest part, but try not to panic. Most of these offsets are for relatively small amounts that just grew with penalties over time.