The IRS identified over 10 million taxpayers who filed their tax returns prior to the American Rescue Plan becoming law and is reviewing those tax returns to determine the correct taxable amount of unemployment compensation and tax. Nearly 4 million refunds will be sent this week. Are you included?
Millions of Americans are receiving IRS refunds as a result of the tax exemption on the first $ 10,200 received as unemployment benefits in 2020. Will you receive the money this week?
The Internal Revenue Service announced on Tuesday it will issue another round of refunds this week to nearly 4 million taxpayers who overpaid their taxes on unemployment compensation received last year.
The American Rescue Plan Act that became law in March excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations for individuals and married couples whose modified adjusted gross income was less than $150,000.
The $150,000 ceiling is the same for all taxpayers, regardless of filing status, such as single or married, and taxpayers must use their total unemployment benefits received when determining their income eligibility for the tax break.
The agency has been reviewing Forms 1040 and 1040SR that were filed prior to the law's enactment to identify those people who are due an adjustment and will either refund the overpayment or apply it to other outstanding taxes or other federal or state debts owed.
According to the IRS website, refunds by direct deposit will begin July 14, and refunds by paper check will begin July 16and it will continue to issue refunds throughout the summer.
For this round, the IRS identified approximately 4.6 million taxpayers who may be due an adjustment, and of that number, approximately 4 million taxpayers are expected to receive a refund.
The refund average is $1,265, which means some will receive more and some will receive less.