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IRS now sending $10,200 refund to millions for unemployment taxes. Will you get a tax break check?

If you paid taxes on unemployment benefits you received in 2020, the IRS could owe you a refund. Here's why.

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The IRS is automatically refunded thousands of dollars paid on unemployment checks in 2020. Here's what to know

The IRS has started refunding thousands of dollars taxed on unemployment checks in 2020. Here's what to know about the tax break.

Sarah Tew/CNET

When you filed your 2020 tax return, did you you pay taxes on the unemployment benefits you received? If you did, you may be due a refund. The IRS is now returning money to nearly 10 million people who filed before the $10,200 tax break that is part of the American Rescue Plan Act became law in March. Under that $1.9 trillion stimulus law, unemployment checks don't count as earned income during the pandemic and you can't be taxed on the money you received in 2020.

The IRS started sending the tax-break refunds to those who qualify last week and said it will continue to refund money through the summer as it processes tax returns and reviews taxes paid on unemployment benefits. In addition to the unemployment tax break, the March stimulus bill also extends the weekly $300 bonus unemployment payments, authorizes a third stimulus check (and "plus-up" payments) and boosts the child tax credit to as much as $3,600 per kid.

Twenty-three million Americans filed for unemployment last year, according to the Bureau of Labor Statistics. Under Pandemic Unemployment Assistance, this included people who were laid off as well as gig workers, contractors and self-employed people who don't normally qualify for unemployment insurance. We'll explain the unemployment tax refund, and the details we're still waiting to learn. Here's when you can expect to receive your first child tax credit payment and how you much you may get when the payments start in July. This story has been recently updated with new information.

IRS unemployment tax refund: Six key things to know

With unemployment refunds up to $10,200 now going out to taxpayers who paid taxes when they filed, here's what you can expect.

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Unemployment tax refund info we're waiting to hear about

There is still something we don't know about the refunds. We've contacted the IRS for clarification:

  • How to contact the IRS if there's a problem with your tax-break refund. (Here's what we know about contacting the IRS about stimulus check problems.)

"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 officer for Jackson Hewitt. Steber suggested checking with a tax professional once you receive your automatic refund to make sure the IRS sent the right amount.

For more details, here are seven ways to get money back on your 2020 tax return, everything about the child tax credit for up to $3,600 per child and what to know about the May 17 tax deadline.

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