The 2021 tax year might rapidly be drawing to a close, but the Internal Revenue Service is still busy issuing refunds to people for 2020.
The tax agency says it recently sent refunds to another 430,000 people who overpaid taxes on their 2020 unemployment benefits. This batch totaled $510 million, with the average refund being $1,189.
Since the IRS began issuing refunds for this, it has adjusted the taxes of 11.7 million people, sending out $14.4 billion overall. All totaled, officials say they have identified 16 million people who are eligible for the adjustment.
The refunds are a result of the American Rescue Plan Act, the March stimulus bill that also issued $1,400 payments. The bill excluded up to $10,200 in unemployment insurance from taxable income for certain individuals, but many affected people had already filed their taxes.
Another round of refunds will go out before the end of the year. The IRS says the review of returns is nearly complete at this point, with the focus now on more complex returns.
People who paid taxes on unemployment last year are not required to file an amended return (unless the change makes them eligible for deductions or credits they didn’t initially claim). The IRS is reviewing tax forms filed before the Rescue Plan’s passage to identify people who are eligible for an adjustment. The agency is urging taxpayers not to call or contact its offices, as that will only slow the process down.
Taxpayers will generally receive letters from the IRS within 30 days of the adjustment, informing them whether they’ll receive a refund—or whether the money will be used for payment of debts to the IRS or other authorized agencies—as well as the amount of the adjustment.
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