Tax Refunds for Unemployment Benefits: When the IRS will send your money and how to verify

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Here’s what to know: The IRS already started sending refunds to taxpayers who received jobless benefits last year and paid taxes on the money. After some frustration with delays in the rollout, many single filers began seeing deposits in their checking accounts starting May 28, with 2.8 million refunds going out the first week of June. The IRS said the next set of refunds will go out in mid-June. The tax break is for those who earned less than $150,000 in adjusted gross income. The $10,200 is the amount of income exclusion for single filers, not the amount of the refund. The amount of the refund will vary per person depending on overall income, tax bracket and how much earnings came from unemployment benefits.Not everyone will receive a refund. The IRS can seize the refund to cover a past-due debt, such as unpaid federal or state taxes and child support. Refunds started going out in May and will go out in batches through the summer as the agency evaluates tax returns. More complicated returns could take longer to process. The IRS is doing the recalculations in two phases, starting with single filers who are eligible for the up to $10,200 tax break. It will then adjust returns for those married-filing-jointly taxpayers who are eligible for the up to $20,400 tax break.If the IRS determines you are owed a refund on the unemployment tax break, it will automatically send a check.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. 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.The IRS will send you a notice explaining the corrections within 30 days of when a correction is made.

We’ll tell you how you can check the status of your refund online, if you’re owed one. As for other unemployment news, half of US states have slashed the $300 weekly bonus payments and some are offering return-to-work bonuses. If you’re a parent expecting your first child tax credit payment on July 15, calculate how much you could get for your family and three ways to find out whether you qualify, including a new IRS letter about your child tax credit payments. We will update this story as we get more information. The refund amount each person gets won’t be the same, though it could be sizable. (The money could be automatically applied to outstanding balances if you owe taxes or other debts.) The first round of refunds started going out in late May to single people without dependents, with the second round expected sometime in mid-June. Married couples and taxpayers with dependents should expect to see their IRS money later this summer. 

Important details about the unemployment tax break and refunds The IRS has been sending federal refunds to people who collected unemployment insurance during the pandemic, with 2.8 million issued so far. This is because the American Rescue Plan added that the first $10,200 of unemployment benefits ($20,400 for married couples filing jointly) received in 2020 isn’t considered taxable income. That means roughly 13 million taxpayers who paid income tax on that money before the change in the law could now be due for some money back. 

How to check the status if you’re getting an unemployment tax refund The IRS says eligible individuals should’ve received Form 1099-G from their state unemployment agency showing in Box 1 the total unemployment compensation paid in 2020 (if you didn’t you should request one online). Some states may issue separate forms depending on the jobless benefits — for example, if you received federal pandemic unemployment assistance (PUA).  3:26

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