IRS now sending $10,200 refund to millions for unemployment taxes. Will you get the tax break check? - CNET

The IRS is now efunding thousands of dollars paid on unemployment checks in 2020. Here's what to know about the tax break.

Sarah Tew/CNET

Did you pay taxes on unemployment benefits you received when you filed your 2020 tax return? If you did, the IRS is now sending refund payments to nearly 10 million people who filed before the $10,200 tax break included in the American Rescue Plan Act became law. Under that $1.9 trillion stimulus law, unemployment checks don't counted as earned income during the pandemic and you can't taxed on the money you received in 2020.

The IRS began sending the tax-break refunds to those who qualify last week and said it will continue to refund money through the summer as the it processes tax returns and reviews taxes paid on unemployment benefits. In addition to the unemployment tax break, the March stimulus bill also extends the weekly $300 bonus unemployment payments, authorizes a third stimulus check (and "plus-up" payments) and boosts the child tax credit to as much as $3,600 per kid.

Twenty-three million Americans filed for unemployment last year, according to the Bureau of Labor Statistics. Under Pandemic Unemployment Assistance, this included people who were laid off as well as gig workers, contractors and self-employed people who don't normally qualify for unemployment insurance. We'll explain the unemployment tax refund and the details we're still waiting to learn. Here's how to see if the IRS owes you extra tax refund money and how to get a $50 discount on your internet bill. This story has been updated with new information.

IRS unemployment tax refund: Six key things to know

With the unemployment refunds now going out to taxpayers, here's what you can expect.

Now playing: Watch this: Child tax credit: How much are you getting?

3:52

Unemployment tax refund info we're waiting to hear about

There is still something we don't know about the refunds. We've contacted the IRS for clarification:

• How to contact the IRS if there's a problem with your refund. (Here's what we know about contacting the IRS about stimulus check problems.)

"This new clarification from the IRS is good news for the millions of taxpayers impacted, but may still be confusing," said Mark Steber, chief tax officer for Jackson Hewitt. Steber suggested checking with a tax professional once you receive your automatic refund to make sure the IRS sent the right amount.

For more details, here are seven ways to get money back on your 2020 tax return, everything about the child tax credit for up to $3,600 per child and what to know about the May 17 tax deadline.

Now playing: Watch this: Your tax questions answered in 3 minutes

3:26

CNET How To

Learn smart gadget and internet tips and tricks with our entertaining and ingenious how-tos.

from CNET https://ift.tt/3fpYmUW
via IFTTT