4 Million Additional Tax Refunds Being Sent Out – Are You Getting One
4 million tax refunds are being sent out. Are you getting one?
The Internal Revenue Service (IRS) will issue another round of refunds to nearly 4 million taxpayers who overpaid on unemployment compensation they received last year.
The American Rescue Plan Act of 2021, which became law in March, excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000.
The IRS has been reviewing tax forms filed prior to the law's enactment to identify those people who are due an adjustment. For taxpayers who overpaid, the IRS will either refund the overpayment, apply it to other outstanding taxes or other federal or state debts owed.
How Much is the Refund
The average refund is $1,265.
When Will Refunds Go Out
Direct deposit refunds have already been sent out. Paper checks will start being mailed out on July 16. The IRS previously issued refunds related to unemployment compensation exclusion in May and June, and it will continue to issue refunds throughout the summer.
How To Get a Refund
Most taxpayers don't need to take any action or call the IRS. However, if, as a result of the excluded unemployment compensation, taxpayers are now eligible for deductions or credits not claimed on the original return, they should file a Form 1040-X, Amended U.S. Individual Income Tax Return.
When to File an Amended Return
Taxpayers should receive a letter from the IRS within 30 days of the adjustment, informing them of what kind of adjustment was made (such as refund, payment of IRS debt payment, or payment offset for other authorized debts) and the amount of the adjustment.