The American Rescue Act Plan, which President Joe Biden approved in March 2021, had an important feature that allowed eligible taxpayers to receive approximately $10,200 in unemployment benefits tax-free.
The problem, however, was that the majority of Americans had already submitted their 2020 tax forms, which showed the year in which the unemployment rate reached 14.7 percent.
The IRS also reviewed their returns and has finished the procedure.
The organization is currently giving 12 million returns totaling $14.8 billion.
Individuals and married couples’ actual gross incomes had to be less than $150,000 to be eligible for the exclusion.
“Some taxpayers got refunds, while others had the additional money used to pay back debts or additional taxes,” said a statement, from the IRS. “In some instances, the exclusion simply caused the person’s adjusted gross income to decrease.
“These taxpayers received notice of the changes by letter sent by the IRS. The letter should be kept alongside the taxpayers’ tax documents.
You may be required to file an amended 2020 tax return if you think you qualify for the employment exclusion and the government does not fix it.
If you’ve previously received the unemployment exclusion on your taxes, the IRS advised you not to do so.
Process time for revised returns is currently above 20 weeks.
The U.S. Sun contacted the IRS to find out when the average direct payment of $1,232 that millions of Americans will receive will be made.
The “Where’s My Refund?” option on the IRS website allows taxpayers to look up the status.
