IRS sending refunds to as many as 10 million who got unemployment checks. Will you get a $10,200 tax break?


The IRS has started refunding thousands of dollars paid on unemployment checks in 2020. Here’s what to know.

Sarah Tew/CNET

The IRS said it is now sending payments to as many as 10 million people who received unemployment benefits in 2020 and paid taxes on that money when they filed their income tax return this year. The IRS said it will automatically refund some or all of the money paid. The American Rescue Plan Act included a $10,200 tax break so that unemployment checks aren’t counted as earned income during the pandemic. You also can’t be taxed on the money.

The IRS said it is now recalculating taxes and this week began sending refunds out to those who those who are eligible. The IRS sent the first refunds this week with the remainder going out through the summer as the IRS processes tax returns and reviews taxes paid on unemployment benefits. In addition to the unemployment tax break, the March stimulus bill also extends the weekly $300 bonus unemployment payments, authorizes a third stimulus check (and “plus-up” payments) and boosts the child tax credit to as much as $3,600 per kid.

Twenty-three million Americans filed for unemployment last year, according to the Bureau of Labor Statistics. Under Pandemic Unemployment Assistance, this included people who were laid off as well as gig workers, contractors and self-employed people who don’t normally qualify for unemployment insurance. We’ll explain the unemployment tax refund and the details we’re still waiting to learn. Here’s how to see if the IRS owes you extra tax refund money and how to get a $50 discount on your internet bill. This story has been updated with new information.

IRS unemployment tax refund: Six key things to know

With refunds now going out, here’s what you can expect.

Now playing:
Watch this:

Child tax credit: How much are you getting?


Unemployment tax refund details we’re waiting to hear about

There is still something we don’t know about the refunds. We’ve contacted the IRS for clarification:

  • How to contact the IRS if there’s a problem. (Here’s what we know about contacting the IRS about stimulus check problems.)

“This new clarification from the IRS is good news for the millions of taxpayers impacted, but may still be confusing,” said Mark Steber, chief tax officer for Jackson Hewitt. “Some taxpayers may have questions as to the timing of any payment and whether it will come in a check or other form.” 

Steber also suggested checking in with a tax professional once you receive your automatic refund to make sure the IRS sent the right amount.

For more details, here are seven ways to get money back on your 2020 tax return, everything about the child tax credit for up to $3,600 per child and what to know about the May 17 tax deadline.

Now playing:
Watch this:

Your tax questions answered in 3 minutes


Source link


Please enter your comment!
Please enter your name here