Waiting for an IRS Unemployment Tax Refund? Here is what you need to know


Millions of Americans who received unemployment insurance last year will get their money back.

Angela Lang / CNET

Did you receive unemployment checks in 2020 and treat that money as income when you filed your tax return this year? If so, you may be eligible for tax relief. Based on new rules under the American rescue plan, workers cannot be taxed on unemployment benefits they received during the pandemic. Since the new regulation was approved after many taxpayers had already filed their returns, they will now be eligible for a IRS Tax Refund for the first $ 10,200 (or $ 20,400 for married couples applying jointly).

While IRS still processes tax returns and reviewing taxes paid on unemployment insurance, the tax agency began sending out unemployment reimbursement checks earlier this month and will continue through the summer. The agency said the amounts would vary; not all adjustments will result in a refund. Here we’ll explain the unemployment tax exemption and tell you what we still don’t know.

You may have also heard of the many states that are withdrawing from the $ 300 in unemployment premiums and other unemployment benefit programs starting next month. If you are a parent, you may also want to know the details of the improvement child tax credit, how much you could get for your family and information on Upcoming IRS Child Tax Credit Portals. This story was updated recently.

9 things to know about upcoming unemployment tax refunds

The IRS says it has started sending refunds to taxpayers who treated their unemployment benefits as income on their taxes this year. Here’s what to expect:

  • The tax break is for those who earned less than $ 150,000 in adjusted gross income.
  • Refunds have started to come out the week of May 10 according to the IRS and will run throughout the summer while the agency evaluates tax returns. More complicated returns may take longer to process. Those waiting for checks have displayed their frustration on Reddit and Twitter on slow deployment.
  • If the IRS determines that you are entitled to a refund on unemployment tax relief, it will automatically send a check.
  • You do not need to file an amended return to request the exemption. (Here’s how track the status of your tax return and reimburse online.) Some who have used tax software like TurboTax have reported seeing their refund amount change due to the unemployment refund, although they haven’t seen a check yet.
  • Refunds will be made as a direct deposit if you provided bank account information on your 2020 tax return. Otherwise, the refund will be sent as a paper check to the address the IRS has on hand.
  • the The IRS performs the recalculations in two phases, starting with single filers who qualify for tax relief of up to $ 10,200. It will then adjust returns for married taxpayers filing jointly who are eligible for tax relief of up to $ 20,400.
  • The IRS will send you a notice explaining the corrections within 30 days of the correction.
  • You will not be able to track the progress of your refund via the IRS Tracking Get My Payment, the Where is my refund tool, the Return status tool changed or another IRS portal.
  • The IRS can seize the refund to cover past due debt, such as unpaid federal or state taxes and child support.

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Things we still don’t know about unemployment tax refunds

The IRS has provided information on its website regarding taxes and unemployment benefits. We still don’t know how to contact the IRS if there is a problem with your tax relief refund. (Here’s what we know about how to contact the IRS for dunning control issues.) We contacted the IRS for clarification.

To find out more, here is some information about the child tax credit up to $ 3,600 per child and who qualifies.


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