The government is granting another set of refunds to taxpayers who received unemployment benefits last year and paid too much tax, the Internal Revenue Service said on Wednesday.
The agency will be giving Americans 1.5 million tax refunds this week, with the typical refund being around $ 1,600, the IRS said. Direct deposit payments will be issued starting July 28th, while paper checks will be mailed starting Friday, July 30th, the agency said.
This is the fourth round of unemployment benefits reimbursements the IRS has issued since Congress changed the tax law this spring to allow former unemployed people to retain more of their benefits. The IRS has three previous rounds of Payments in May, June and earlier this month.
Usually, unemployment benefits are subject to federal income tax. However, the American rescue plan passed in March had up to $ 10,200 in unemployment benefits would not be taxable. The change, passed after millions of unemployment benefit recipients had already filed tax returns, meant that many refunds were due.
The IRS said beforehand that up to 13 million people could be entitled to a refund. Since May, the agency has returned $ 10 billion to 8.7 million taxpayers, it said. The agency plans to further review and adjust the tax returns in the summer.
How do you get a refund?
Most taxpayers who may have overpaid their taxes don’t need to do anything to get a refund, according to the IRS. The agency said it is proactively adjusting taxpayers’ refunds and sending money back.
Trending news
However, a group of people may need to file an amended tax return in order to receive all of the money they are due. If a taxpayer has a dependent and receiving unemployment benefits from last year’s total income puts income below the income tax credit threshold, they must file an amended declaration to claim the tax credit, the IRS said.
This doesn’t apply to individual taxpayers who are eligible for the loan – the IRS will automatically adjust their tax returns, the agency said.
The maximum income to apply for the EITC is approximately $ 41,000 for a single parent of a child and $ 47,000 for a married couple. The limits increase with more children.