Many people are aware of the unexpected unemployment tax refunds, especially as federal unemployment is set to end soon. But there are a few things people should know.
Basically what happened, is anyone who got unemployment benefits in the year 2020 and paid taxes on them, they will be refunded whatever they paid.
This was a provision in the American Rescue Plan Act.
Anyone making under 150k a year was entitled to taxes on up to $10,200 being waived.
Over 8.7 million refunds have gone out and millions more are still waiting for these refunds.
This refund doesn’t need to be reported on next years taxes.
Unemployment for 2021 though, is going to be taxed.
The IRS plans to finish sending these refunds by December, and started out with the easier tax situations. If someone has a more complicated tax return, they’re likely to get their refund later.
One way to find out if you’re getting the refund is to use the Where’s My Refund? tool or check the Get Refund Status tool on the IRS webpage.