Numerous refunds for taxes paid on 2020 unemployment benefits have already been delivered, but more are still on the way.
IRS Continues to Send Stimulus Checks
In a recently published article in CBS News, the IRS said that it is still distributing federal stimulus funds to eligible Americans, with another $2.3 million payments sent last week. Some of the payments include "plus-up" adjustments for individuals who received less money in previous checks than they were entitled to.
The current batch of payouts is part of the Biden administration's American Rescue Plan, which aims to provide $1,400 to each qualified adult and kid. The IRS said on June 9 that it has already sent over $169 million payments totaling $395 billion, with the most recent batch being $4.2 billion.
While the newest stimulus payments were supposed to arrive in bank accounts in March, some individuals have had to wait weeks or months for their checks. Because the IRS was able to swiftly verify eligibility based on income and also identify where to mail or direct deposit the checks, it prioritized delivering payments to individuals who had already filed their 2019 or 2020 tax returns.
More about the Unemployment Benefits
The IRS has already begun reimbursing individuals who got unemployment benefits last year and paid taxes on the money. Following some irritation due to delays in the rollout, many single filers started receiving payments through their bank accounts on May 28, with $2.8 million refunds being sent the first week of June, per CNET.
As elaborated in an article in WFMY News2, the American Rescue Plan enabled taxpayers to deduct up to $10,200 in unemployment compensation from their AGI. As a result, people did not have to pay taxes on such income. Unfortunately, the law had gone into force after a number of people filed forms and paid taxes. Now, the IRS is required to provide refunds or credits.
The first installment of payments was made on June 7, 2021. These were the simplest returns for single taxpayers with no child credit or refundable tax credits. Couples filing as married jointly and other more complex returns are included in this phase. Those with more complex returns, such as earned income and child tax credits, may be included in the next wave.
How to View the Tax Refund Status Online?
As explained by IRS, eligible people should have obtained Form 1099-G from their state unemployment agency, which should have shown the total unemployment compensation paid in 2020 in Box 1. Some states may issue different forms based on the kind of unemployment benefits obtained, especially if you were granted federal pandemic unemployment aid.
The IRS web tools, like the "Where's My Refund" and "Amended Return Status" tools, are unlikely to offer information on the status of your unemployment tax refund. The IRS also reminds people to refrain from calling the agency.
If the IRS has your banking information, they will provide refunds through direct deposit, otherwise, the refund will be sent as a paper check to the address on file. The IRS also intends to issue a letter outlining the changes. According to the IRS, these adjustments are being made automatically and in a gradual manner. The stages will last till the end of the summer.