You may be owed a refund from the IRS if you paid taxes this year on unemployment benefits you received in 2020. The IRS has started returning money to as many as 10 million people who filed their tax return before thethat is included in the became law. Unemployment benefit money, under the new rules, isn’t considered earned income during the pandemic, so you can’t be taxed on the money you received in 2020.
The IRS last week began sending the first of the tax-break refunds to those who are eligible. The agency said it’ll continue to refund the money through the summer asand reviews taxes paid on unemployment benefits. The IRS said refund amounts will vary and not every adjustment will result in a refund. The March stimulus bill also extends the weekly , authorizes a (and ) and to as much as .
Twenty-three million Americans filed for unemployment last year, according to the Bureau of Labor Statistics. Under, 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 when you can expect to receive and when the payments start in July. This story has been recently updated with new information.
IRS unemployment tax refund: 8 key things to know now
With unemployment refunds now going out to taxpayers who paid taxes when they filed, here’s what you can expect.
- If the IRS determines you are owed a refund on the tax break, it will automatically send a check.
- The tax break is for those who earned less than $150,000 in .
- Refunds started going out the week of May 10 and will extend into the summer, as the IRS evaluated tax returns.
- The IRS is doing the recalculations in two phases, starting with those 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.
- You do not need to . (Here’s how to .)
- 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.
- The IRS will send you a notice explaining the corrections within 30 days of when a correction is made.
- You will not be able to track the progress of your refund through the Amended Return Status tool or another IRS portal. , the , the
Unemployment tax refund info we’re still 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 with your tax-break refund. (Here’s what we know about contacting the IRS about .)
For more details, here everything about theand .