The IRS said it is now sending payments to as many as 10 million people who received unemployment benefits in 2020 and paid taxes on that money when they filed their income tax returns this year. The IRS said it will automatically refund some or all of the money paid. Theincluding one so that unemployment checks during the pandemic are not counted as income. You also cannot be taxed on the money.
The IRS said it is now recalculating taxes and began sending refunds to those who qualify this week. The IRS sent the first refunds this week, and the rest went through the summer as theand reviews taxes paid on unemployment benefits. In addition to the tax break for unemployment, the March incentive law also extends the weekly , authorizes one (and ) and to as much as .
Last year, 23 million Americans filed for unemployment, according to the Bureau of Labor Statistics. belowThis included layoffs, handy workers, contractors, and the self-employed who are not normally eligible for unemployment insurance. We will explain the unemployment tax refund and the details we are still waiting to learn. Here’s how to tell if the IRS owes you anything and how to get a . This story has been updated with new information.
IRS Tax Refund for Unemployment: Six Important Things to Know
Now that refunds are going out, here’s what to expect.
Details about unemployment tax refund we await
There is one more thing we don’t know about refunds. We contacted the IRS for clarification:
- How to contact the IRS if there’s a problem. (Here’s what we know about contacting the IRS .)
“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 officer. “Some taxpayers may have questions about the timing of a payment and whether it will come in a check or some other form.”
Steber also suggested checking in with a tax professional once you receive your automatic refund to make sure the IRS has sent the correct amount.
For more information, here are seven ways, all about the and what you need to know about the .