Could a new tax refund be coming your way?
A new round of tax refunds for 1.5 million people who overpaid started going out Wednesday, according to an announcement from the Internal Revenue Service.
These refunds average $1,686 per person, said the IRS, which said it is continuing to adjust unemployment compensation from previously filed income tax returns.
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When the American Rescue Plan Act of 2021 became law in March, it excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations. Individuals and married couples with modified adjusted gross income up to $150,000 were eligible.
The most recent refund is the fourth round related to the unemployment compensation exclusion program to go out. Refunds by direct deposit started going out Wednesday and refunds by paper check will begin Friday, said the IRS.
According to the IRS, the service has issued over 8.7 million unemployment compensation refunds totaling over $10 billion since May.
“The IRS will continue reviewing and adjusting tax returns in this category this summer,” said the IRS announcement. It also said that the service is working to make sure that taxpayers eligible for refunds do not need to take any more steps in order to receive their payments.
“However, if, because of the excluded unemployment compensation, taxpayers are now eligible for deductions or credits not claimed on the original return, they should file a Form 1040-X, Amended U.S. Individual Income Tax Return,” explained the announcement.
In addition to being sent directly to taxpayers, the refunds may also be applied by the IRS to outstanding taxes or other federal debts, said the service.
Taxpayers should be notified within 30 days if an adjustment was made to their filing.