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Tax Refund for Unemployment Benefits 2020: IRS Schedule, Qualifications, and More


The IRS automatically adjusts the 2020 tax returns for the unemployment tax benefit and issues letters with the amount.

Angela Lang/CNET

More than 2.8 million federal repayments are being made to individuals who received unemployment benefits during the pandemic and paid income tax on that money. The American rescue plan, passed in March, treats the first $10,200 in unemployment benefits as non-taxable — that’s $20,400 in tax-free income for married couples filing jointly. Some 13 million taxpayers who filed taxes before that law change can now get refunds.

But when can you expect yours? The first round of refunds to single people without dependents began at the end of last month. The next round is expected in mid-June. Couples and taxpayers with dependents will see their IRS money later this summer. The amount of the refund will vary from person to person, and some who owe taxes or other debts may have the money applied to those balances. Below we explain what we know, including how to check your special refund online.

For more unemployment news, you may be interested in which states are opting out $300 . Weekly Bonus Payments and what to offer? return to work bonuses. If you are a parent waiting for your first payment of the enhanced child tax credit on July 15, calculate how much you could get for your family and three ways to find out if you qualify, including a new IRS Letter About Your Child Tax Credit Payments. We will update this story regularly.

Details on the Unemployment Tax and IRS Refunds

The IRS has already started sending refunds to taxpayers who received unemployment benefits last year and paid taxes on the money. After some frustration with the rollout, many single filers began seeing deposits in their checking accounts as of 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 you need to know:

  • 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 be issued in batches over 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 are paid as 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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Check the status of your unemployment benefit online

The IRS says that eligible individuals must have received Form 1099-G from their state unemployment office with box 1 showing the total unemployment benefits paid in 2020 (if you didn’t, you would have to apply for one online). Some states may issue separate forms depending on unemployment benefits, such as if you received Federal Pandemic Unemployment Assistance (PUA).

The IRS online applications, such as the Where is my refund? tool and the tool Changed declaration status do not provide information about the status of your unemployment benefit refund. The IRS also says not to call the agency.

As far as we know, the easiest way to find out when the IRS processed your refund (and for how much) is 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.

Some IRS unemployment tax details pending break

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. If a refund was made, you should expect a letter from the IRS within 30 days of the adjustment, stating whether it resulted in a refund or if it was used to settle debts.

Here’s what we do 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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