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Has the tax authorities already processed your unemployment benefit refund? This is what you need to know


Americans who received unemployment benefits last year and filed tax returns early are starting to get their money back.

Angela Lang/CNET

Some 13 million Americans who paid taxes on unemployment benefits received in 2020 could receive a major tax break. This week, the IRS began processing refunds to 2.8 million people who filed their returns before March — when new legislation under the American rescue plan made some unemployment benefits tax-free.

While the amount of any refund will depend on a person’s total income and how much of it comes from unemployment benefits, individual taxpayers can expect to be compensated for income taxes paid on up to $10,200 in jobless assistance (up to $20,400 for married couples who submit an application jointly) ). The unemployment tax refunds will be sent in waves, with the first batch going to singles with no dependents. Couples and taxpayers claiming next of kin will have to wait until later in the summer to see their refunds.

Not everyone who may qualify for a tax refund will get the money. We’ll explain why and more, including how to check your refund online. You may also want to learn more about states that opt ​​out of: $300 Unemployment Benefit Bonus and the return to work bonuses some states offer. If you’re a parent, learn more about the enhanced child tax credit, how much you could get for your family from July 15 and how to use the Upcoming IRS Child Tax Credit Portals. This story has been updated with new information.

What you need to know about the unemployment tax and refunds?

The IRS has begun sending refunds to taxpayers who received unemployment benefits and paid taxes on the money last year. After some initial delays, more single filers started seeing deposits in their checking accounts from May 28, with 2.8 million repayments in the first week of June. The IRS said the next set of refunds will take place in mid-June.

Here’s what to expect:

  • The tax break is for those who made less than $150,000 adjusted gross income.
  • The $10,200 is the amount of income exclusion for single filers, not the amount of the refund. The amount of the refund will vary per person.
  • Not everyone gets money back. The IRS may seize the repayment to cover past-due debt, such as unpaid federal or state taxes and child support.
  • Refunds began in May and will continue through the summer as the agency reviews tax returns. More complicated returns may take longer to process.
  • The IRS performs the recalculations in two phases, starting with single filers eligible for the tax break up to $10,200. It will then adjust the returns for those married taxpayers who jointly qualify for the tax benefit of up to $20,400.
  • If the IRS determines that you owe an unemployment tax refund, it will automatically send a check.
  • You do not have to submit an amended declaration to claim the exemption. (here’s how to) track your tax return status and refund online.) Some who used tax software like TurboTax said they’ve seen their refund amount change as a result of the unemployment refund, though they haven’t seen a check yet.
  • Refunds will be issued as a direct deposit if you have provided your 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 message explaining the corrections within 30 days of a correction being made.

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How to check your unemployment benefits online

If your tax return has been processed a while ago, the tax authorities can Receive my payment tracker, the Where is my refund? tool and the Amended Return Status tool probably won’t help you figure out the status of this particular unemployment tax refund.

However, you can find out when the IRS processed your refund and for how much by looking at your tax statement. Here’s how you find it:

1. Go to IRS.gov and log in to your account. If you have not opened an account with the IRS, it will take some time as you will need to take several steps to confirm your identity.

2. After logging into your account, you will see the Account Home page. Click View tax information.

3. On the next page, click on the Get transcript button.

4. Here you will see a drop-down menu asking you why you need a transcript. Select federal tax and let the Customer file number field empty. Click on the To go button.

5. The next page shows your Return Transcript, Account Transcription Records, Account Transcript and Wage & Income Translation for the last four years. You want the Account Transcript 2020.

6. This will open a PDF of your transcript: Focus on the Transactions section. What you’re looking for is a listing listed as Refund issued, and it should have a date at the end of May or June.

If you don’t, it probably means the IRS hasn’t reached out to your return yet.

What we don’t know yet about the unemployment tax refund

The IRS has provided information on taxes and unemployment benefits on its website. We still don’t know how to contact the IRS if there is a problem with your tax credit refund. We have contacted the tax authorities for clarification.

However, here’s what we know about contacting the IRS for: stimulus control problems. For more information on incentive payments and emergency relief, here’s information about the: child discount for up to $3,600 per child and details about who is eligible?.

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