You may be wondering if you’re eligible to receive an unemployment tax refund. If you’re single or married and filed jointly, you can deduct up to $20,400 from your earnings. If you file your tax return early, your unemployment benefits are tax-free. However, you’ll need to file an amended return if the tax break is not applied. Here’s how to calculate your eligibility. If you qualify, the IRS will send you a notice.
The unemployment tax refund process was supposed to last through the end of the summer, but the IRS has yet to issue an update. While the agency announced that it sent out more than 8.7 million payments in July, a spokesperson told CNBC that she doesn’t know when the next round of checks will be issued. In the meantime, people should wait for the next round of refund checks to arrive. The goal is to send as many people as possible their tax refunds.
Unemployment benefits will continue until 2021, meaning that more than 24 million Americans will be eligible to receive them. However, lawmakers did not re-enact provisions that cancel the accompanying taxes. While some individuals may have had their taxes withheld, many did not. This situation makes unemployment benefits expert Andrew Stettner nervous about people still out of work and getting hit by the IRS. But if you’re eligible for an unemployment tax refund, you might be eligible.
If you’re eligible for an unemployment tax refund, you should receive it by direct deposit. Most taxpayers do not have to file an amended return, but they should if they have dependents or claim unemployment benefits. You can use the IRS tracker to check your unemployment tax refund status. All you need to do is enter your Social Security number and Individual Taxpayer Identification Number (ITIN), and then click “Refund Issued.” If there’s no entry, you can assume that the IRS has not processed your return.
The federal government waives the tax on the first $10,200 of your unemployment benefits in 2020. However, states can impose different rules. You should contact a tax professional before filing your federal income tax return. Alternatively, you can get a paper check from the IRS. If you’re not comfortable filing your return online, consider consulting a tax professional. If you’re still unsure, consult with H&R Block to find out the right way to proceed.
The American Rescue Plan Act, signed by President Joe Biden, provides that the first $10,200 of your unemployment compensation is a nontaxable amount. The act also exempts certain unemployment compensation benefits for married couples with an adjusted gross income under $150,000. So, it may not be a bad idea to file for your refund. And while you’re at it, don’t forget to keep in mind that the American Rescue Plan has passed and has made this program possible.
The IRS will automatically adjust your tax return to include the benefits you’re receiving. If you’re eligible, you may be able to deduct up to $10,200 from your taxable income. Remember, though, that you may still be eligible for additional tax credits. You should keep a close eye on your unemployment tax refund to ensure that it’s used in the most advantageous way. There are many things to consider when filing a tax return.