Here are the details…
The IRS is now set to send out an additional four million tax refunds this week to Americans who paid too much tax for their 2020 unemployment benefits.
The IRS released in a statement, “To ease the burden on taxpayers, the IRS has been reviewing the Forms 1040 and 1040SR that were 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.”
According to Yahoo Finance, “Under the $1.9 trillion American Rescue Plan, the first $10,200 in unemployment benefits aren’t taxed for eligible filers. Because the legislation was signed into law halfway through the tax season, some taxpayers had already filed their federal returns without taking advantage of the new tax break.”
Furthermore, the IRS found that after reviewing almost 5 million tax refunds around 4 million were eligible for an average of $1,265 in tax refunds due to the new American Rescue Plan being signed into law half way through tax season. These reviews are expected to continue and more will be refunded throughout the summer.
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