If you paid taxes this year on unemployment benefits you received in 2020, you may be owed a refund. The IRS is now returning money to nearly 10 million people who filed their tax return before thethat is included in the became law. With the new rules, unemployment benefit money isn’t considered earned income during the pandemic, so you can’t be taxed on the money you received in 2020.
The IRS last week began sending the first of the tax-break refunds to those who are eligible. The agency said it’ll continue to refund the money through the summer asand reviews taxes paid on unemployment benefits. The March stimulus bill also extends the weekly , authorizes a (and ) and to as much as .
Twenty-three million Americans filed for unemployment last year, according to the Bureau of Labor Statistics. Under, this included people who were laid off as well as gig workers, contractors and self-employed people who don’t normally qualify for unemployment insurance. We’ll explain the unemployment tax refund, and the details we’re still waiting to learn. Here’s when you can expect to receive and when the payments start in July. This story has been recently updated with new information.
IRS unemployment tax refund: 6 key things to know now
With unemployment refunds up to $10,200 now going out to taxpayers who paid taxes when they filed, here’s what you can expect.
Unemployment tax refund info we’re still waiting to hear about
There is still something we don’t know about the refunds. We’ve contacted the IRS for clarification:
- How to contact the IRS if there’s a problem with your tax-break refund. (Here’s what we know about contacting the IRS about .)
“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. Steber suggested checking with a tax professional once you receive your automatic refund to make sure the IRS sent the right amount.
For more details, here everything about theand .