The IRS gave some more details of the expected rollout for the money on May 14. The IRS had not given any official updates to the process as of Thursday afternoon.īut the IRS did post on Twitter on Wednesday: "#IRS is now issuing refunds for taxes on 2020 unemployment compensation that were paid before they were excluded from taxable income by recent law changes." "The IRS will send a separate notice to the taxpayer if the refund is offset to pay unpaid debts."Īlso it's important to note that many people who are married - and have more complex income tax returns - won't receive the extra refund until later this summer. "These refunds are subject to normal offset rules, such as past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support or certain federal nontax debts (i.e., student loans)," the IRS said. You're not getting cash if you owe money to the federal government and others. Not everyone who is owed cash is receiving this money now. But on Thursday, he received an extra $7.76 - money he assumed could be added interest.
He was expecting $2,244 in an extra tax refund, thanks to the new exclusion. But he filed his tax return on March 9 - two days before the American Rescue Plan was signed into law. The single man had collected unemployment compensation last year after auto factories shut down during the pandemic. One Detroit area taxpayer told me he spotted an extra $2,251.76 in his Comerica account on Thursday morning. Once that extra income is excluded, many people are owed big money. (The legislation excludes only some 2020 unemployment benefits from taxes.) Taxpayers may exclude unemployment compensation up to $20,400 if married filing jointly when two people lost work.
If you filed before the law changed, single individuals were taxed on up to $10,200 in jobless benefits that were later excluded from taxable income under the new rule. The Internal Revenue Service has begun issuing some extra tax refunds that are owed to those who filed tax returns before a significant tax break on jobless benefits became law on March 11.
Now might be a good time for some taxpayers who lost work during the pandemic in 2020 to check their bank accounts.
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