If you received unemployment benefits in 2020 and paid taxes on the money this year when you filed your income tax return, the IRS could automatically refund all or part of what you paid. Thepassed in March included a so that unemployment checks you received during the do not count as earned income for the year. You also can't be taxed on the money. If you already paid taxes on the unemployment money, the IRS said it will automatically refund the amount for qualified people.
This month, the first refunds are expected to arrive for around 7.3 million people, according to a report from the Treasury Department. Refunds will continue to be sent during the summer, as the . In addition to this unemployment tax break, the March stimulus bill also extends the weekly bonus , authorizes a (what to know about ) 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 how to see if the IRS owes you and how to get a . This story has been updated with new information.
IRS unemployment tax refund: 3 big things to know
- If the IRS determines the taxpayer is owed a refund, it will send a check automatically.
- The refunds are supposed to get sent out starting in May and extend into the summer. We've asked the IRS for a specific date for when the first payments will go out.
- You do not need to . (Here's how to .)
Unemployment tax refund information we're waiting to hear about
- In what form the unemployment refund will arrive.
- If you'll be able to track it with the or some other portal.
- If you'll receive a , that you have been refunded tax money.
- How to contact the IRS if there's a problem. (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. "Some taxpayers may have questions as to the timing of any payment and whether it will come in a check or other form."
Steber also suggested checking in 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 .