Unemployment benefits: IRS may refund you $10,200 for taxes already filed. What to know



Did you receive unemployment benefits in 2020 and pay taxes on those benefits? You might be eligible for some extra money back. The March stimulus law added a new $10,200 tax exemption that gives you a tax break on the unemployment benefits you received. The law also included more weeks added to the $300 bonus payments, along with a third stimulus check and an increase to the child tax credit. There’s been some confusion around how the tax break might work, but the IRS says it will handle the exemption and automatically send out refunds on tax already paid in May.

The IRS said it will automatically refund money to eligible people who had already filed their tax return before the unemployment changes went into effect.

In 2020, 23 million Americans filed for unemployment due to the coronavirus pandemic, according to the Bureau of Labor Statistics. Under the Pandemic Unemployment Assistance created under the CARES Act in March 2020, this included those who were laid off as well as gig workers, contractors and self-employed people who don’t normally qualify for unemployment insurance. Here’s what we know about the unemployment tax refund right now, and the details we’re still waiting to learn.

Unemployment tax refund: Everything we know right now

  • If the IRS determines the taxpayer is owed a refund, it will send a check automatically.
  • The refunds will start in May and extend into the summer.
  • You do not need to file an amended return to claim the exemption (here’s how to track your tax return status and refund online).

Details on the unemployment tax break we still don’t know

  • When exactly the payment will come.
  • In what form the unemployment refund will arrive.
  • If you can track it with the IRS Get My Payment tool or some other portal.
  • If you will receive a notice in the mail, as with stimulus checks, that you have been refunded tax money.
  • How to contact the IRS if there’s a problem (here’s what we know for 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. The IRS is still providing clarification on these and other questions related to the just announced program. Once taxpayers receive their automatic payments in the coming weeks and months it may be a good idea to check in with a trusted tax pro to make sure the IRS computed their amount correctly.”

For more details, here are seven ways to get more 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 new May 17 tax deadlineRead more>>

Source:-cnet

Register Form

Name
Email Address
Phone No