(Presidentialwire.com)- According to the IRS, tax filings for 2020 that included overpayments for unemployment benefits that employees received that year were recently corrected. According to the tax authority, 12 million tax refunds have been given.
The IRS reported on Friday that taxpayers received tax refunds totaling $14.8 billion, or $1,232 on average. IRS sent letters to taxpayers informing them of the corrections to their 2020 tax returns.
The American Rescue Plan Act of 2021, which President Joe Biden signed into law in March 2021, led to the tax review. Amounts up to $10,200 in 2020 unemployment benefits were exempt from taxation under the Act, although some taxpayers had already filed their returns at the start of 2021 before the provision took effect.
Due to this, the IRS examined returns submitted by workers who claimed unemployment benefits as income in 2020 but submitted their forms before the rule took effect. Usually, unemployment benefits are regarded as taxable income.
The IRS stated on Friday that some taxpayers received refunds while others had the excess money used to pay back taxes or other debts. Some people’s adjusted gross income was merely reduced due to the exclusion.
Although the IRS granted refunds for 12 million of the approximately 14 million amended tax forms, it added. Some unemployment benefits were exempt from taxation for single people and married couples with adjusted gross incomes under $150,000.
According to the Akron Beacon Journal, which last month highlighted the situation of a taxpayer who filed his 2020 return in February 2021, other taxpayers have been waiting for their refunds for over a year. Bob Dyer, a former newspaper columnist, thought he owed the IRS over $2,600 at the time. But when the tax relief for unemployment benefits was computed, it turned out that he was entitled to a refund of more than $1,000.
In December, the Akron Beacon Journal reported that Dyer was still awaiting his reimbursement. He was informed that the IRS would automatically reimburse the money and that he shouldn’t modify his 2020 tax return. According to Dyer, the tax agency told him multiple times that it would take an additional 60 days to settle the problem.
The IRS stated that it has now completed making those repairs, but it also said that taxpayers who are entitled to the exclusion and have not received a correction from the IRS might need to file an amended 2020 tax return to get their refunds.