It’s been a long time since we’ve heard anything from the Internal Revenue Service (IRS) about those much-coveted tax refunds for people who received unemployment compensation, but that day is finally here.
After Fast Company reported on a wave of mysterious direct deposits last week, the IRS confirmed Monday that it has sent out another 430,000 unemployment-related refunds, with checks averaging $1,189. The refunds are part of an ongoing Herculean effort by the agency to review and correct millions of tax returns that needed to be adjusted after the passage of the American Rescue Plan Act in March. The act excluded up to $10,200 in 2020 taxable unemployment income, meaning millions of taxpayers were due refunds.
To date, the IRS says it has now distributed 11.7 million of these refunds, to the tune of $14.4 billion. Monday’s update is the first official news release about the effort since late July.
It’s unclear how many more refunds have yet to be distributed, but the IRS says it has largely finished its review of returns. In its update, it says it’s currently focusing on more complex returns and plans to “issue another batch of corrections” before the end of this year. A blog post from the National Taxpayer Advocate in September identified about 436,000 returns that had been flagged for further review, despite the fact that the effort was only supposed to continue through the summer.
Taxpayers whose returns are affected by the adjustment should receive notice from the IRS within 30 days.