The IRS is sending an additional 1.5 million taxpayers refunds averaging $1,686 on 2020 unemployment insurance (UI) taxes, the agency said Wednesday.<\/p>\n
Unemployment insurance benefits typically count as taxable income. However, the\u00a0American Rescue Plan\u00a0(ARP), signed into law by President Joe Biden in March, excluded UI benefits of up to $10,200 from taxable income for 2020.<\/p>\n
Because the ARP became law in March, many people had already filed their taxes and paid taxes on all of their benefits. The IRS has been issuing refunds since May, and has returned over $10 billion to over 8.7 million people so far, the agency says.<\/p>\n
This is the fourth round of UI tax refunds the IRS has sent out. The payments will hit bank accounts Wednesday, July 28. Paper checks will be sent Friday, July 30.<\/p>\n
Earlier this year, the IRS said it had identified around 10 million people who may qualify for a refund. The payments are being sent on a rolling basis, and those with the simplest tax returns received theirs first. The IRS says it is now reviewing more complicated returns, which include those of people with children and those who take many credits and deductions.<\/p>\n
The agency says that most people do not need to do anything in order to receive a refund. For more details on eligibility and other questions, read this article.<\/p>\n