The IRS is still returning money to people who paid taxes on their 2020 unemployment benefits, so if you’re waiting for a refund, check your bank account.
The latest batch of 430,000 refunds amounted to more than $510 million, the agency said this week, and to date, more than 11.7 million refunds totaling $14.4 billion have been issued. While the review of returns is nearly complete, the IRS said, more corrections are expected before the end of the year.
The corrections stem from a last-minute provision in the American Rescue Plan Act that excluded the first $10,200 in unemployment compensation from taxation for those making under $150,000. Since the legislation was passed after tax season had started, millions of Americans had already filed their returns and paid taxes on all their unemployment income.
Instead of requiring those people to file amended returns, the IRS has been adjusting the returns and automatically sending refunds, or if warranted, applying the amounts to taxes due or other debts owed. The latest batch of returns averaged $1,189 per taxpayer. Those who are affected will receive a letter from the IRS within 30 days to notify them of the adjustment. The actual refunds will be delivered via direct deposit or, if bank details aren’t available, paper check, according to an IRS spokesperson.
The agency said it’s also making corrections to other tax credit amounts affected by the exclusion, including the Earned Income Tax Credit and the child tax credit, though those who didn’t claim the latter two credits at all but may now be eligible will be contacted by the IRS and may need to do more to receive any new benefits.
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