Awas added into the details of the for those who received unemployment benefits in 2020. Also included are , a and a . There's some confusion surrounding how the tax break might work, but the IRS says it will handle the exemption and send out refunds if needed.
The agency made an update to the unemployment benefits tax exemption in the latest stimulus bill on March 31, saying it will recalculate taxes for people who received unemployment compensation in 2020 and already .
Twenty-three million Americans filed for unemployment last year due to the, according to the Bureau of Labor Statistics. Under the created under the CARES Act last March, this included those who were laid off from their job as well as gig workers, contractors and self-employed people who don't normally qualify for unemployment insurance.
Here's everything to know so far
- If the IRS determines the taxpayer is owed a refund, it will send a check automatically
- The refunds will start in May and extend into the summer months
- You do not need to (here's how to )
What we don't know right now
- When exactly the payment will come
- In which form the unemployment refund will arrive
- If you can track it with the or some other portal
- If you will receive a , that you have been refunded tax money
- How to contact the IRS if there's a problem (here's what we know for )
"This new clarification from the IRS is good news for the millions of taxpayers impacted, but may still be confusing," said Mark Steber, chief tax information officer for Jackson Hewitt. "Some taxpayers may have questions as to the timing of any payment and whether it will come in a check or other form. The IRS is still providing clarification on these and other questions related to the just announced program. Once taxpayers receive their automatic payments in the coming weeks and months it may be a good idea to check in with a trusted tax pro to make sure the IRS computed their amount correctly."
For more details, here are, everything about the and what to know about the .