BATON ROUGE, La (BRPROUD)- Millions of Americans who received unemployment benefits in 2020 and paid taxes on the money are due for a refund from the IRS.
The American Rescue Plan allows eligible tax payers to exclude up to $10,200 (up to $20,400 for married couples filing jointly) from your taxable income, ultimately lowering your tax liability on your 2020 return.
Here is what we know now:
- If the IRS determines you are owed a refund on the unemployment tax break, it will automatically correct your return and send a check or deposit the payment in your bank account.
- Refunds will go out as a direct deposit if you provided bank account information on your 2020 tax return. Otherwise, the refund will be mailed as a paper check to the address the IRS has on hand.
- You don’t need to file an amended return to claim the exemption. (Here’s how to track your tax return status and refund online.) Some who used tax software such as TurboTax said they have seen their refund amount change due to the unemployment refund, although they have yet to see a check.
- The IRS will send you a notice explaining the corrections within 30 days of when a correction is made.
How to check the status of your Unemployment Refund:
- Go to IRS.gov and log in to your account. (If you haven’t opened an account with the IRS, this will take some time as you’ll have to take multiple steps to confirm your identity.)
2. Click View Tax Records.
3. Click the Get Transcript button.
4. Here you’ll see a drop-down menu asking the reason you need a transcript, then select Federal Tax and leave the Customer File Number field empty, and click Go.
5. The following page will show you numerous of options on the type of record to view. You’ll want the 2020 Account Transcript.
6. This will open a PDF of your transcript: Focus on the Transactions section. What you’re looking for is an entry listed as Refund issued, and it should have a date in late May or June.
If you don’t have that, it likely means the IRS hasn’t gotten to your return yet.
To learn more information on the Unemployment Tax Refund, click here.