IRS starts sending refunds to those who overpaid taxes on unemployment benefits

[Omaha Steve]

Source: CBS NEWS

BY IRINA IVANOVA

Americans who overpaid taxes on unemployment benefits this year will start to receive refunds this week, the Internal Revenue Service announced Friday.

Under the American Rescue Plan, workers who received $10,200 or less in unemployment benefits last year don't have to pay taxes on that money, as they normally would. However, Congress passed the law change in March, after millions of people had already filed their tax returns. As many as 10 million people potentially overpaid their taxes and could be in line for refunds, the IRS said Friday.

The agency has begun correcting those tax returns and issuing refunds. It's doing the work in phases, starting with single taxpayers with simple returns — such as those who didn't claim children or refundable tax credits.

More complex returns, including those filed by married couples filing jointly, will take until the end of the summer to correct, the IRS said.

Read more: https://www.cbsnews.com/news/unemployment-tax-refund-irs/

[IrishEyes]

1. I think I will be one of those people getting money back.

My temp job is ending in a couple of months so the money would be helpful. I did my taxes in late February.

[SarcasticSatyr]

2. I may be be getting some money back as well ....

I really hope so.

[iluvtennis]

3. So is it you don't owe taxes on the first $10,200 of unemployment you received. OR, does

it mean if you got $10,201/more, then you have to pay taxes.

[forthemiddle]

4. The first $10,200 is tax free

But that wasn’t decided until this year. When you apply for UI you had the option to have taxes taken out. Because they decided to exempt that tax after it had already been paid, that means that the IRS has to send it back to you as a refund.

[iluvtennis]

6. Cool, thanks for clarifying - much appreciated. n/t

[ChubbyStar]

5. Poorly written article but the $10,200 is exempt for everyone who got UI & made

less than $150,001. As part of COVID relief legislation, federal taxes for filers can be waived for up to $10,200 in unemployment income for the 2020 tax year, provided that you made $150,000 or less—that's the make-it-or-break-it threshold with no phase out.

[iluvtennis]

7. Cool, thanks for clarifying - much appreciated. n/t