advertisement
advertisement

You might get an extra IRS tax refund this month as a result of unemployment: Here’s the latest

The U.S. Treasury estimates that more than 7 million people could qualify for lower unemployment taxes under a provision in the American Rescue Plan.

You might get an extra IRS tax refund this month as a result of unemployment: Here’s the latest
[Photo: Wikimedia Commons]
advertisement
advertisement

Millions of taxpayers who collected unemployment last year might be eligible to receive an additional refund from the Internal Revenue Service (IRS), although it’s unclear how many checks will be distributed or when, exactly, they’ll go out.

advertisement

A report from the U.S. Treasury last week estimated that, as of early March, 7.3 million people who filed 2020 tax returns qualified for a provision under the American Rescue Plan Act that reduced their amount of taxable unemployment compensation by up to $10,200. The provision applies to people making less than $150,000 a year. But because it didn’t go into effect until March 11—when President Joe Biden signed the latest stimulus package—the change will be applied retroactively to qualifying people whose returns had already been received by the IRS.

Importantly, the IRS says in its latest guidance that it will automatically calculate whether people are due this additional money. Then, it will issue a refund check or apply the money to taxes owed. That means you don’t have to anything. There’s no need to file an amended tax return unless your reduction in income qualified you for a credit or deduction not claimed on your original return. The IRS uses the following example:

For example, if you did not claim the Earned Income Tax Credit (EITC) on your originally filed return because your AGI was too high, but the exclusion allowed for unemployment compensation now reduces your AGI, you should file an amended return to claim the credit if now eligible.

The first of these refund checks are expected to go out this month, and they will continue throughout the summer. As of this week, the IRS has not provided an exact timeline.

advertisement
advertisement

Reached for comment, the IRS said it’s still on track for sometime in May, but a spokesperson had no new information about when the checks will be distributed or how many payments will be made. We’ll update this post when we hear more.

For now, all you can do is sit back and wait for the bucks to roll in.

About the author

Christopher Zara is a senior staff news editor for Fast Company and obsessed with media, technology, business, culture, and theater. Before coming to FastCo News, he was a deputy editor at International Business Times, a theater critic for Newsweek, and managing editor of Show Business magazine

More