Unemployment benefits: You may get a $10,200 tax break from the IRS. Here’s when and how

If you paid taxes on unemployment benefits your received in 2020, the IRS could owe you a refund. The American Rescue Plan Act includes a $10,200 tax exemption on the unemployment benefits you received. But if you already paid when you filed your tax return, the IRS said it will automatically refund money to eligible people who filed before the unemployment tax break went into effect. The IRS said the first refunds would go out this month.

The new stimulus bill also gives you more weeks of the weekly bonus $300 unemployment payments, a third stimulus check  for up to $1,400 and expanded child tax credit payments for up to $3,600 per kid.

23 million Americans filed for unemployment last year due to the coronavirus pandemic, according to the Bureau of Labor Statistics. Under the Pandemic Unemployment Assistance created by the CARES Act in March 2020, this included those who were laid off as well as gig workers, contractors and self-employed people who don’t normally qualify for unemployment insurance. Here’s what we know about the unemployment tax refund right now, and the details we’re still waiting to learn. While you’re here, here’s how to sign up for a $50 discount on your internet bill.

3 important details to know about the unemployment tax refund

Details we still don’t have about the unemployment tax refund

“This new clarification from the IRS is good news for the millions of taxpayers impacted, but may still be confusing,” said Mark Steber, chief tax officer for Jackson Hewitt. “Some taxpayers may have questions as to the timing of any payment and whether it will come in a check or other form. The IRS is still providing clarification on these and other questions related to the just-announced program. Once taxpayers receive their automatic payments in the coming weeks and months it may be a good idea to check in with a trusted tax pro to make sure the IRS computed their amount correctly.”

For more details, here are seven ways to get more money back on your 2020 tax return, everything about the child tax credit for up to $3,600 per child and what to know about the May 17 tax deadline.