If you paid tax on unemployment benefits you received in 2020 you could be due a refund from the IRS. Here’s what to know.
Did you receive unemployment benefits in 2020? And then earlier this year pay income tax on the money you received? If you did, you could be among the first group of 2.8 million taxpayers the IRS is refunding money to. Under the American Rescue Plan, those who paid taxes on unemployment benefits could qualify for a tax break and may be due a refund. The IRS so far has identified 13 million taxpayers who may qualify and is sending the first batch of refunds.
Whether you qualify for the refund depends in part on your earnings and how much income tax you paid on jobless benefits last year. Individual taxpayers can exclude up to $10,200 (as much as $20,400 for married couples filing jointly). The unemployment tax refunds will be sent in batches: The first round will go to single people without dependents. Married couples and taxpayers with dependents should see their IRS money later this summer.
We’ll explain all the details we know, including how to check on your refund online. You may want to know which states are opting out of $300 bonus unemployment payments and which states are offering return-to-work bonuses. If you’re 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 how to use the upcoming IRS child tax credit portals. Here’s also why you want to hold on to that IRS letter about your child tax credit payments. We continue to update this story.
What to know about the unemployment tax break and the IRS refunds
The IRS has started sending refunds to taxpayers who received jobless benefits last year and paid taxes on the money. After some frustration with the rollout, more single filers began seeing deposits in their checking accounts starting May 28, with 2.8 million refunds going out the first week of June. The IRS said the next set of refunds will go out in mid-June. ReadMore
Source : cnet