When the American Rescue Plan was signed into law by President Joe Biden, it included a third stimulus check, and the expanded child tax credit, among other things. The bill also excluded $10,200 in 2020 unemployment funds from being taxable.
If you filed your taxes before the bill passed and filed for the entire amount of unemployment compensation received, you would be entitled to a large refund. The good news? You don’t have to do anything to receive it.
According to a press release from the IRS, they “will determine the correct taxable amount of unemployment compensation and tax. Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed.”
If a valid bank account is on file from filing a 2020 tax return, the IRS will deposit the funds via direct deposit. If accurate banking information is not on file, the refund will come in the form of a paper check.
The refund is only available for households with an adjusted gross income of $150,000 or less in 2020. The amount is also determined by how much you needed to pay in taxes.
Refunds have already started going out and will continue through the summer.
➡️ #IRS reminder: Adjustments for unemployment compensation income exclusion are being made automatically in a phased approach to extend MAY -AUGUST. Learn more at https://t.co/hcqbFq5oZe
— IRSnews (@IRSnews) May 21, 2021
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