Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Millions Still In Line For Unemployment Tax Refunds
Millions Still In Line For Unemployment Tax Refunds


The Internal Revenue Service is delivering a fourth round of special tax refunds this week to 1.5 million taxpayers who paid taxes on unemployment benefits when they filed their 2020 tax returns. For this round, the average refund is $1,686; direct deposit refunds started going out Wednesday, and paper checks today.

Still waiting for your refund? An estimated 13 million taxpayers are due unemployment compensation tax refunds. Since May, the IRS has issued more than 8.7 million unemployment compensation tax refunds totaling $10 billion. That means more than 4 million taxpayers are still in line.

Why the special unemployment benefits tax refunds? In the March 11th Covid-relief American Rescue Plan, Congress made up to $10,200 of 2020 unemployment benefits nontaxable for individuals and married couples whose modified adjusted gross income was less than $150,000. Generally, unemployment benefits are taxable, including basic state benefits as well as the extra $600 weekly CARES Act federal pandemic benefits. The unemployment tax break was welcome news to many folks. The problem: A lot of taxpayers already had filed their 2020 tax return before Congress put in the retroactive tax break. That’s made things messy.

If you got unemployment benefits in 2020, you should have received a Form 1099-G showing the amount you were paid and any federal income taxes withheld. You don’t need a revised form. Instead, the IRS is making automatic corrections based on the new $10,200 exclusion. ทดลองเล่นสล็อต pg

So what’s taking so long? It’s not just unemployment compensation tax refunds that are going out. The IRS is still sending out regular 2020 tax refunds, third round stimulus payments, plus-up stimulus payments for those who got shorted, as well as monthly advanced payments of the 2021 child tax credit. As of July 24, 2021, the IRS had 14.7 million unprocessed individual returns, according to today’s operations update. So far as the unemployment refunds, the IRS says it started with the simplest tax returns and is now reviewing more complex returns.

In most cases, taxpayers don’t have to do anything to get any additional unemployment refund dollars or other credits they’re due. That includes the Recovery Rebate Credit (that’s a true up of 2020 stimulus payments), the Earned Income Credit if no dependents, and the Advance Premium Tax Credit (the health insurance subsidy). Essentially, the IRS says will automatically amend your return and issue a refund.

But in some cases, taxpayers do need to file an amended tax return, if, because of the excluded unemployment compensation, they’re now eligible for some deductions or credits not claimed on the original return. For example, you should file an amended 2020 return if you didn’t claim the Additional Child Tax Credit or the Earned income Tax Credit with dependents, and possibly other credits and deductions. That leaves taxpayers needing to consult tax pros.

Forum Jump:

Users browsing this thread: 1 Guest(s)