The tax administration will start issuing unemployment tax refund in case of unemployment 2020 for some taxpayers this week, the agency announced on Friday.
Refunds will be sent continuously. Individual applicants with the “simplest” tax returns will first receive a refund, including those without children and those who have not sought a refund of tax breaks, the agency says.
Unemployment insurance benefits are usually calculated as taxable income. However, American rescue plan (ARP), signed by President Joe Biden in March, has excluded user interface benefits of up to $ 10,200 from taxable income for 2020.
The IRS says it has identified over 10 million people who filed tax returns before the ARP became law and could qualify for a refund or reduced balance on their tax account.
The second phase will accommodate more complicated returns, including married couples who file applications together. The agency expects it will need to be completed “by the end of the summer.”