Mar 31, 2021
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About this Deal
The Internal Revenue Service will begin refunding money to people in May who already filed their returns without claiming the new tax break on unemployment benefits, the agency said Wednesday.
The federal tax break went into effect following the recent changes made by the American Rescue Plan. The latest $1.9 trillion stimulus package created a new tax break for tens of millions of workers who received unemployment benefits last year after businesses were forced to close and lay them off during the coronavirus pandemic.
What if I already filed my taxes?
For those taxpayers who already have filed and figured their tax based on the full amount of unemployment insurance, the IRS will determine the correct taxable amount of unemployment compensation and tax, according to the agency. Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed, the IRS added.
For those who have already filed, the IRS will do these recalculations in two phases, starting with those taxpayers eligible for the up to $10,200 exclusion. The IRS will then adjust returns for those married filing jointly taxpayers who are eligible for the up to $20,400 exclusion and others with more complex returns.