430,000 people to receive tax refund from IRS
The IRS has started issuing refunds to 430,000 more taxpayers who received unemployment compensations last year, the federal agency announced Monday.
It’s the latest batch of corrected refunds for millions of people who paid taxes on the benefits, which were excluded from income last year under the American Rescue Plan, according to an IRS news release.
Under the legislation, the first $10,200 of unemployment compensation received in 2020 would not be taxed for individuals and married couples who earned less than $150,000.
The estimated value of the new round of refunds totals over $510 million.
To date, the IRS says it has identified at least 16 million taxpayers who received unemployment and may be eligible for an adjustment. So far, the agency has sent out 11.7 million tax refunds valuing about $14.4 billion to recipients of the federal benefit. Efforts are ongoing to correct overpayments so that taxpayers impacted by the law won’t have to file an amended return.
“The review of returns and processing corrections is nearly complete as the IRS already reviewed the simplest returns and is now concentrating on more complex returns,” the release stated.
Another batch of corrected refunds is slated to go out sometime before the end of the year, though the federal agency did not provide a narrower time frame for when such payments will be distributed. Typically, the IRS sends out letters to impacted taxpayers within a month of the adjustment with details about the payment.
Most people won’t need to take any further action to get the money.
For more information, go to the IRS’s “2020 Unemployment Compensation Exclusion FAQs” page.