Where is my unemployment tax break refund? What to know



Two weeks have passed since the IRS announced it would begin sending refunds for 2020 jobless benefits. While unemployment benefits are typically treated as taxable income, the American Rescue Plan in March waived federal tax on up to $10,200 of those benefits per person (or up to $20,400 for married couples filing jointly). Therefore, those who had filed their tax return before the new rules went into effect overpaid and are now owed money from the IRS.

Here’s the question: When will the refunds arrive to millions of waiting Americans? We know the IRS is still reviewing and processing tax returns and that the refunds were supposed to start in May and continue through the summer. The agency said that some adjustments will result in a refund, while others will get a reduced balance or no change at all.

We’ll continue to follow the details around the unemployment tax exemption. You may also want to know about the states 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 was recently updated with new information.

What you need 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.
  • The IRS is doing the recalculations in two phases, starting with single filers who are eligible for the up to $10,200 tax break. It will then adjust returns for those married-filing-jointly taxpayers who are eligible for the up to $20,400 tax break.
  • If the IRS determines you are owed a refund on the unemployment tax break, it will automatically send a check.
  • The IRS can seize the refund to cover a past-due debt, such as unpaid federal or state taxes and child support.
  • You don’t 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…Read more>>

 

Source:-cnet

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