What to know if you’re waiting for that unemployment tax refund from the IRS



Two weeks ago, the IRS announced that it would automatically begin issuing tax refunds on 2020 unemployment benefits. That means that if you treated your unemployment checks as income when you filed your tax return this year, the IRS will retroactively be offering a tax break on the first $10,200 (or $20,400 for married couples filing jointly). Millions of Americans are slated to receive the unemployment insurance tax refunds as part of new rules under the American Rescue Plan signed into law in March.

Yet those refunds haven’t appeared for many. While we know that the agency is still processing tax returns and reviewing the taxes paid on unemployment insurance, the refunds were supposed to start being deposited this month and continue throughout the summer. The agency said the amounts will vary, that is, that adjustments could result in a refund, a reduced balance or no change at all.

We’ll explain what we know and don’t yet know about the unemployment tax exemption. You might also want to know that half of US states are opting out of $300 bonus unemployment payments and other jobless benefits programs as early as next month. If you’re a parent, here are details about the enhanced child tax credithow much you could get for your family and how to use the upcoming IRS child tax credit portals. This story has been updated with new information.

What are the nine things to know about the unemployment tax refunds?

The IRS claims it already started sending refunds to taxpayers who received jobless benefits last year. But those still waiting for checks have posted their frustration on Reddit and Twitter over the slow rollout and the lack of transparency from the agency.

Here’s what to expect:

  • The tax break is for those who earned less than $150,000 in adjusted gross income.
  • Refunds started going out the week of May 10 according to the IRS and will run through the summer as the agency evaluates tax returns. More complicated returns could take longer to process.
  • If the IRS determines you are owed a refund on the unemployment tax break, it will automatically send a check.
  • 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.) Some who used tax software such as TurboTax said they have seen their refund amount change due to the unemployment refund, although they have yet to see a check.
  • Refunds will go out as a direct deposit if you provided bank account information on your 2020 tax return. Otherwise, the refund will be mailed as a paper check to the address the IRS has on hand…Read more>>

Source:-cnet

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