Did you receive unemployment benefits during the pandemic-fueled “Lock Down” in 2020? Then a refund in the neighborhood of $1,000 may be arriving in your mailbox very soon.
The IRS recently announced they completed corrections on roughly 14 million tax returns filed in 2020.
The agency revisited these filings due to overpayments for unemployment benefits issued to those who were laid off or lost jobs during the pandemic.
And as a result of their review, the IRS has issued 12 million tax refund payments on 2020 tax income tax filings.
According to the IRS, the average tax refund works out to just over $1,200 per eligible taxpayer. And the amount headed back to taxpayers is estimated to be $14.8 billion in total.
Additionally, eligible taxpayers should have received a letter from the IRS detailing the corrections to their 2020 income tax filing.
What Prompted The Review?
American Rescue Plan Act of 2021, signed into law by President Joe Biden in March 2021, lopped off $10,200 in 2020 unemployment aid from workers’ taxable income for that tax year.
But many taxpayers had already filed their returns in 2021 before the new law subtracting this income took effect.
To address the early 2021 filings, the IRS revisited returns for those who reported unemployment income in 2020 and filed their paperwork before March 2021.
Not Everyone Will Receive A Refund
The IRS noted some taxpayers’ overpayments will be applied to taxes due or other debts.
Thus, those who owed taxes (for back taxes or because their income rose above the taxable threshold), even with the unemployment benefit reductions, will not receive a refund.
Still Waiting For Your Return?
Some taxpayers have reported they’ve been waiting for more than a year on their unemployment over-payment refunds.
Many who believed they were due a refund based on the American Rescue Plan Act changes to the tax code contacted the IRS about adjustments. And those who did were told all revisions would be made “automatically.”
If you believe you’re among the taxpayers owed a refund for over-payment unemployment benefits and have yet to receive a refund, get in touch for a FREE consultation!