IRS Is Issuing Refunds To People Who Paid Taxes On Unemployment
Congratulations! If you paid taxes on 2020 unemployment benefits, you may be one of the more than 2.8 million people who will be receiving a tax refund from the IRS. And some of those refunds will be getting mailed out this week.
According to WHDH/7 News Boston, those unemployment benefits that you paid taxes on no longer apply due to changes made by the American Rescue Plan Act. Passed by Congress in March, the law excludes the first $10,200 of unemployment benefits from household income for those who earned less than $150,000 in adjusted gross income in 2020.
Some people may now be due a refund because that change happened while tax season was already underway. Others who owe taxes or other debts may have the money applied to those balances instead. Exactly how much each taxpayer will get may vary.
So far, the IRS has reviewed 3.1 million tax returns, of which more than 2.8 million were eligible for refunds. The review process will continue into the summer. Meanwhile, the next set of refunds is set to go out in the middle of June.
Those whose returns are adjusted will receive a letter from the IRS to inform them of the change and the amount, usually within 30 days. The IRS is also reviewing returns for other tax credits including the earned income tax credit and the recovery rebate credit, to see if they are also affected by the exclusion.
As of now, the IRS has determined that approximately 13 million people may be eligible for the adjustment. For more, please check out WHDH's website here.