On Friday, Jan. 6, the IRS announced the distribution of $14.8 billion in refunds to 12 million recipients with an average amount of $1,232.
$1,232 Payment Sent To 12 Million Recipients
The American Rescue Plan Act, 2021 was signed into law by President Joe Biden, one of the key provisions of the COVID-19 relief bill involved excluding some unemployment benefits from taxation. These refunds total around $14.8 billion, and the average amount eligible individuals will receive is $1,232 to 12 million people.
Several people had already submitted tax returns before the American Rescue Plan Act being passed. As a result, they had previously declared this income and paid taxes on it. The IRS opted to review tax forms submitted before to the passage of the American Rescue Plan Act to determine who had been affected by this law change.
Are You Eligible?
To be eligible, anyone who paid taxes on all of their unemployment compensation earned in 2020 could qualify for a money refund from the IRS after this review. The IRS also stated that the corrections for the tax returns also includes other issues relating to the Earned Income Tax Credit, other COVID-19 stimulus checks, or the American Opportunity Tax Credit.
The IRS found most of these issues and recently completed the final automatic corrections tax year 2020. This can be done with online filing software and should be done ASAP to avoid leaving funds on the table. Additionally, taxpayers can view Online Account or request that a 2020 tax account transcript be mailed to them.