IRS could automatically refund taxes on unemployment benefits. What to know

President Joe Biden’s American bailout plan added one $ 10,200 tax exemption for those who received unemployment benefits in 2020 more weeks of a $ 300 bonus, a third stimulus check and a increase of the child discountThere was some confusion as to how the tax break might work, but the IRS says it will handle the exemption and send refunds if needed.

The agency made an update on the tax exemption for unemployment benefits in Biden’s bailout on Wednesday and said it will recalculate taxes for people who received unemployment benefits in 2020 and all have filed their tax returns

Because of the coronavirus According to the Bureau of Labor Statistics, 23 million Americans filed for a pandemic for unemployment last year. Below the Pandemic unemployment assistance, or PUA, created under the CARES Act last March, this included those fired from their jobs, as well as handymen, contractors, and self-employed workers who would not normally qualify for unemployment insurance.

Here’s what you need to know so far

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What we don’t know yet

“This new clarification from the IRS is good news for the millions of taxpayers affected, but it can still be confusing,” said Mark Steber, Jackson Hewitt’s chief tax information officer. Some taxpayers may have questions about the timing of a payment and whether it will come in a check or other form. The IRS is still clarifying these and other questions related to the newly announced program. Once taxpayers have their automatic payments made In the coming weeks and months, it may be a good idea to check with a trusted tax authority to make sure the IRS has calculated their amount correctly. ”

For more details, here are seven ways to get more money back on your 2020 tax return, all about the child discount up to $ 3,600 per child and what you need to know about the new tax deadline of May 17

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