The Internal Revenue Service has confirmed that special tax refunds for unemployment overpayments in 2020 will not be sent out until 2022.
Another batch of special refunds is expected before the end of 2021, but that won’t mean everyone gets paid. The IRS had sent out approximately 430,000 refunds in the last two months totaling more than $510 million.
Are you eligible for $1,189 in an IRS refund?
These refunds on unemployment overpayment stem from the American Rescue Plan, which Congress approved in March 2020. That plan allowed up to $10,200 of 2020 unemployment benefits to be tax-free.
The problem? Millions of Americans had already submitted 2020 tax returns, requiring amendments, corrections, and updates.
The unemployment tax pass was capped for those who made more than $150,000 in 2020.
What’s happening next with IRS refunds?
The IRS is sending out letters to Americans still owed refunds. If you haven’t received a letter, but believe you’re eligible for a refund, you can follow up with a tax professional or the IRS.
The IRS is also expecting to deal with a number of these requests in 2021 tax returns, which will begin getting filed in less than 45 days.
What happens if the IRS never pays?
Experts say the next tax season could be more complicated than the previous two. Mostly because of the backlog the IRS currently faces. If they are unable to finalize 2020 tax returns – then 2021 returns and refunds will surely be delayed.
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