As we head into our final weekend in August, millions of American taxpayers are still wondering whether they will receive one of those surprise tax refunds from the Internal Revenue Service that were first announced in March. The refunds are related to taxes paid on 2020 unemployment compensation and are the result of changes to the law that took effect with the American Rescue Plan. Because of those changes, millions of taxpayers were determined to have overpaid.
For the most part, the IRS is correcting returns automatically and issuing refunds accordingly, but that process is messy and cumbersome for the understaffed agency, which is probably why it has left so many people guessing. The first payments were delivered in late May (with more batches continuing in June, July, and August), and the IRS has said that the process of reviewing and correcting tax returns—especially the more complex ones—will continue throughout the summer.
Or rather, more specifically, it said the process will continue through the end of summer. But as of this week, it has not provided a more specific timeline. That “end of summer” timeline is likely causing increased anxiousness among eligible taxpayers who have yet to receive one of these payments. After all, Labor Day weekend—the unofficial end of summer—is only a week away. Based on the tenor of posts on social media and in group forums, many who have been waiting all summer have given up hope.
The good news is, summer 2021 doesn’t actually end until September 22, the calendar date of the fall equinox. Knowing what we know about the pace at which the IRS usually operates, it’s likely that these payments will continue at least until then, which gives us almost a full month, and maybe even beyond that. (Let’s just say the IRS has been known to undershoot its payments estimates in the past.)
We’ve reached out to the IRS for more details on the timeline and will update this post if we hear back.
As of its last update in late July, the agency said it distributed 8.7 million unemployment-related refunds, with the average refund size $1,686. A source familiar with the payment rollout told Fast Company that more than half of the checks have now gone out, but that the IRS did not have an official end date as of yet.
If you believe you’re owed one of these refunds, the best thing to do is check your online tax transcript, which should update with a payment date before the payment actually shows up. And hang in there—summer isn’t over yet.