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IRS unemployment tax refunds update: What happened to phase 2 payments?

The Internal Revenue Service originally said it would send a second batch of payments in mid-June, but it has said little since then.

IRS unemployment tax refunds update: What happened to phase 2 payments?
[Source Images: Jayalgraphics/iStock; Scott Webb/Pexels]
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More than a month after the Internal Revenue Service said it sent out the first round of tax refunds related to 2020 unemployment compensation exclusion, Americans who were hoping they’d receive payments as part of the second round are still waiting for updates.

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The IRS originally said it would send the second batch of payments in mid-June, but now that we’re more than a week into July, the agency has not provided an updated timeline, and it’s unclear how many payments—if any—were distributed with that batch.

Reached for comment, an IRS spokesperson told Fast Company that she had no new information about the payments but expected the agency would provide an update soon. We’ll update this post as soon as we hear more.

(Update, Friday, July 9. A number of Twitter users on Friday tweeted that their IRS tax account has been updated and now shows a payment date for their unemployment tax refund, with some citing a date of July 14. You can learn how to check your online tax account here.) 

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The American Rescue Plan Act allowed taxpayers to exclude up to $10,200 in unemployment compensation ($20,400 if you’re married and filing jointly) from their 2020 taxes, but because the law didn’t take effect until March, people who filed taxes before that didn’t get to take advantage of the exclusion. The IRS now has to correct millions of returns, and millions of those early filers may now be due a refund, although it’s unclear how many. The National Taxpayer Advocate estimates that up to 43% of individual income tax returns were already filed before the law took effect.

A few Facebook groups have been dedicated to providing updates about the refunds for months, but some users there say they’ve all but given up hope, citing the lack of updates or clear communication on the part of the IRS. In late June, the IRS updated an FAQ page on the topic, including details about who might be eligible for refunds, but it did not provide any further clarity on the timeline. It has said in the past that refund distribution would continue through the summer.

For now, there’s not much taxpayers can do except keep checking their bank accounts and wait for a letter the IRS said it would mail to those whose returns are corrected. Eligible taxpayers will direct deposit should receive the money automatically in their bank accounts, while those without direct deposit should receive a check by mail.

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

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