The Internal Revenue Service recently completed the final corrections and refunded nearly 12 million taxpayers’ accounts who overpaid their taxes on unemployment compensation they received in 2020.
The Internal Revenue Service recently completed the final corrections and refunded nearly 12 million taxpayers’ accounts who overpaid their taxes on unemployment compensation they received in 2020.
2020 Unemployment Benefits
The American Rescue Plan Act of 2021, was signed into law last March 2021, after President Joe Biden, pass the bill and excluded “up to $10,200 in unemployment compensation from taxable income calculations.”However, the change was made after some taxpayers had already filed their taxes, causing them to overpay on unemployment compensation in 2020.
This impacted individual taxpayers and married couples with modified adjusted gross income under $150,000 in 2020. To lessen the burden on taxpayers, the IRS took action to review Forms 1040 and 1040-SR that was filed before the law’s passing to identify taxpayers who had already reported unemployment compensation as income and were qualified for the correction. The IRS is determined the correct taxable amount of unemployment compensation and tax.
The Average Tax Refund Worth $1,232
The IRS says it fixed, nearly 12 million refunds totaling $14.8 billion and averaging about $1,232 each. Affected taxpayers either received a refund or had the money applied to taxes due or other debts.
Those impacted should have gotten a letter about the corrections. The IRS stresses keeping the letter for tax records and for those Eligible taxpayers who did not get a correction from the IRS might have to file an amended 2020 tax return to obtain the refund.
Furthermore, if you believe you qualify for a refund, you can visit the IRS website for more information.
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