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 thethat is part of the 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 asand reviews taxes paid on unemployment benefits. In addition to the unemployment tax break, the March stimulus bill also extends the weekly , authorizes a (and ) and to as much as .
Twenty-three million Americans filed for unemployment last year, according to the Bureau of Labor Statistics. Under, 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 and 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.
- If the IRS determines you are owed a refund on the tax break, it will automatically send a check.
- Refunds started going out the week of May 10 and will extend into the summer, as the IRS evaluated tax returns.
- You do not need to . (Here's how to .)
- Refunds will go out as a direct deposit if you provided bank account information on your 2020 tax return. Otherwise, the refund will be mailed as a paper check to the address the IRS has on hand.
- The IRS will send you a notice explaining the corrections within 30 days of when a correction is made.
- You will not be able to track the progress of your refund through the Amended Return Status tool or another IRS portal. , the , the
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 .)
"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, everything about the and what to know about the .