The unemployment tax break was welcome news to many folks. Generally, unemployment benefits are taxable, including basic state benefits as well as the extra $600 weekly CARES Act federal pandemic benefits. Why the special unemployment benefits tax refunds? In the March 11th Covid-relief American Rescue Plan, Congress made up to $10,200 of 2020 unemployment benefits nontaxable for individuals and married couples whose modified adjusted gross income was less than $150,000. That means more than 4 million taxpayers are still in line. Since May, the IRS has issued more than 8.7 million unemployment compensation tax refunds totaling $10 billion. Still waiting for your refund? An estimated 13 million taxpayers are due unemployment compensation tax refunds. For this round, the average refund is $1,686 direct deposit refunds started going out Wednesday, and paper checks today. The Internal Revenue Service is delivering a fourth round of special tax refunds this week to 1.5 million taxpayers who paid taxes on unemployment benefits when they filed their 2020 tax returns.
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More than 4 million taxpayers are still in line. Millions Still In Line For Unemployment Tax Refunds No other official news from the IRS has been issued regarding payment schedule. The first batch of these supplemental refunds went to those with the least complicated returns in early summer, and batches are supposed to continue for more complicated returns, which could take longer to process.Īccording to an forum and another discussion on, some taxpayers who filed as head of household or as married with dependents started receiving their IRS money in July or getting updates on their transcript with dates in August and September. The IRS announced it was doing the recalculations in phases, starting with single filers with no dependents and then for those who are married and filing jointly. With the latest batch of payments in July, the IRS has now issued more than 8.7 million unemployment compensation refunds totaling over $10 billion. See the 2020 Unemployment Compensation Exclusion FAQs for more information, including details on filing an amended return. This latest batch of corrections affected over 519,000 returns, with 430,000 taxpayers receiving refunds averaging about $1,189. To date, the IRS has issued over 11.7 million refunds totaling $14.4 billion. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000.Įarlier this year, the IRS began its review of tax returns filed prior to the enactment of ARPA to identify the excludible unemployment compensation. The $10,200 is the amount excluded when calculating one’s adjusted gross income it is not the amount of refund. The American Rescue Plan Act of 2021, enacted in March, excluded the first $10,200 in unemployment compensation per taxpayer paid in 2020. Some will receive refunds, while others will have the overpayment applied to taxes due or other debts. So far, the IRS has identified over 16 million taxpayers who may be eligible for the adjustment. The IRS efforts to correct unemployment compensation overpayments will help most of the affected taxpayers avoid filing an amended tax return. WASHINGTON The Internal Revenue Service recently sent approximately 430,000 refunds totaling more than $510 million to taxpayers who paid taxes on unemployment compensation excluded from income for tax year 2020. Taxpayers should receive letters from the IRS within 30 days of the adjustment, informing them whether they’ll receive a refund or if the money will be used for payment of debts to the IRS or other authorized agencies, as well as the amount of the adjustment.If you received unemployment benefits in 2020, a tax refund may be on its way to you The agency is urging taxpayers not to call or contact its offices, as that will only slow the process down. The IRS is reviewing tax forms filed before the Rescue Plan’s passage to identify people who are eligible for an adjustment. People who paid taxes on unemployment last year are not required to file an amended return (unless the change makes them eligible for deductions or credits they didn’t initially claim). The IRS says they will continue through the summer. This is the third round of these refund payments, with previous ones having gone out in May and June. The bill excluded $10,200 in unemployment insurance from taxable income for certain individuals, but many affected people had already filed their taxes.Įlectronic payments will be made on July 14, with paper checks going out two days later, the IRS says. The refunds are a result of the American Rescue Plan Act, the March stimulus bill that also resulted in $1,400 payments to individuals.
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The average check will come in at $1,265. The Internal Revenue Service says it has issued another round of refunds to 4 million taxpayers.