Millions of unemployment tax refunds in July: IRS timeline, tax transcripts and more

The common IRS refund for taxpayers who paid an excessive amount of tax on unemployment compensation is $1,265. 

Angela Lang/CNET

Tax refunds for individuals who overpaid on final 12 months’s unemployment advantages are not coming quickly sufficient. But that further IRS cash may be in your checking account or your mailbox. In a recent announcement by the IRS, the tax company confirmed one other batch of refunds to almost 4 million individuals — direct deposits had been made July 14, and paper checks began going out quickly after. Yet many taxpayers ready on their cash nonetheless really feel in the darkish and categorical their angst via online platforms

Here’s the way it works: The American Rescue Plan in March that made the first $10,200 of 2020 jobless benefits — or $20,400 for married {couples} submitting collectively — nontaxable revenue. Roughly 13 million taxpayers had been doubtlessly eligible for an adjustment and a refund as a result of they overpaid once they filed their taxes earlier than the invoice was handed. The refund common is $1,265, the IRS stated, however you would get more or much less, relying in your revenue and different components. 

An IRS TREAS 310 banking transaction code might imply your tax return was adjusted and your refund deposited. (By the best way, in case you’re a mother or father it might additionally imply you bought your first child tax credit payment this week.) Keep studying if you wish to know the way to entry your tax transcript for clues about your refund standing. For different unemployment information, see which states are ending the $300 weekly bonus payments. We may let you know how your baby tax credit score could affect your taxes in 2022. We’ve up to date this story.

Ten information about IRS refunds on unemployment advantages

In late May, the IRS began sending refunds to taxpayers who obtained jobless advantages in 2020 and paid taxes on that cash earlier than the American Rescue Plan went into impact. That legislation waived taxes on as much as $10,200 in unemployment insurance coverage advantages for people incomes lower than $150,000 a 12 months.

The first batch of these supplemental refunds went to these with the least sophisticated returns (single taxpayers with no dependents), and batches are alleged to proceed all through the summer season for more sophisticated returns. According to an forum and one other dialogue platform on Twitter, some taxpayers who filed as head of family or as married with dependents began receiving their IRS cash in early July. Others appear to be getting updates on their transcript with dates of July 14 or July 26. 

On July 13, the IRS stated it is sending out 4 million more funds by way of direct deposit and paper examine. 

Here’s a fast recap of what we all know:

  • The tax break is just for individuals who earned lower than $150,000 in adjusted gross income and for unemployment insurance coverage obtained throughout the pandemic in 2020. 
  • The $10,200 is the quantity of revenue exclusion for single filers, not the quantity of the refund. The quantity of the refund will range per individual relying on total revenue, tax bracket and how a lot earnings got here from unemployment advantages.
  • Most taxpayers don’t need to file an amended return to assert the exemption. But in case you assume you are now eligible for deductions or credit based mostly on an adjustment, examine the recent IRS release for the checklist of who ought to file an amended return. 
  • If the IRS determines you’re owed a refund on the unemployment tax break, it is going to mechanically appropriate your return and ship a refund with none extra motion out of your finish. 
  • Not everybody will obtain a refund. The IRS can seize the refund to cowl a past-due debt, comparable to unpaid federal or state taxes and baby help. 
  • Refunds started going out in May and will exit in batches via the summer season because the company evaluates tax returns. More sophisticated returns might take longer to course of.
  • The IRS is doing the recalculations in phases, beginning with single filers who’re eligible for the up-to-$10,200 tax break. It will then alter returns for these taxpayers who’re married and submitting collectively, who’re eligible for the up-to-$20,400 tax break.
  • Refunds will exit as a direct deposit in case you supplied checking account info in your 2020 tax return. A direct deposit quantity will doubtless present up as “IRS TREA 310 TAX REF.” Otherwise, the refund will probably be mailed as a paper examine to the deal with the IRS has readily available.
  • The IRS will ship you a discover explaining the corrections inside 30 days of when a correction is made.
  • Some states, however not all, are adopting the unemployment exemption for 2020 state revenue tax returns. 

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How to find your tax transcript to see your unemployment refund

The IRS says eligible individuals should’ve received Form 1099-G from their state unemployment agency showing in Box 1 the total unemployment compensation paid in 2020. (If you didn’t, you should request one online.) Some states may issue separate forms depending on the jobless benefits — for example, if you received federal pandemic unemployment assistance, or PUA. 

One method to know if a refund has been issued is to wait for the letter that the IRS is sending taxpayers whose returns are corrected. Those letters, issued within 30 days of the adjustment, will tell you if it resulted in a refund or if it was used to offset debt. The IRS says not to call the agency. 

You can try the IRS online tracker applications, aka the Where’s My Refund tool and the Amended Return Status tool, but they may not provide information on the status of your unemployment tax refund. 

An immediate way to see if the IRS processed your refund (and for how much) is by viewing your tax records online. You can also request a copy of your transcript by mail or through the IRS’ automated phone service by calling 1-800-908-9946. 

Here’s how to check your tax transcript online:

1. Visit and log in to your account. If you haven’t opened an account with the IRS, this will take some time as you’ll have to take multiple steps to confirm your identity.

2. Once logged into your account, you’ll see the Account Home page. Click View Tax Records.

3. On the next page, click the Get Transcript button.

4. Here you’ll see a drop-down menu asking the reason you need a transcript. Select Federal Tax and leave the Customer File Number field empty. Click the Go button.

5. The following page will show a Return Transcript, Records of Account Transcript, Account Transcript and Wage & Income Transcript for the last four years. You’ll want the 2020 Account Transcript

6. This will open a PDF of your transcript: Focus on the Transactions section. What you’re looking for is an entry listed as Refund issued, and it should have a date in late May or June. 

If you don’t have that, it likely means the IRS hasn’t gotten to your return yet. 

What we’re waiting to hear about unemployment refunds

The IRS has only provided limited information on its website about taxes and unemployment compensation. We’re still unclear on the exact timeline for payments (they’re a bit sporadic), which banks get direct deposits earlier or how to contact the IRS if there’s a problem with your tax break refund. 

Also, since some states fully tax unemployment benefits and others don’t, you might have to do some digging to see if the unemployment tax break will apply to your state income taxes. This chart by the tax preparation service H&R Block could give some clues, along with this state-by-state guide by Kiplinger

Here’s how to track your tax return status and refund online and what we know about contacting the IRS for stimulus check problems. For more on stimulus payments and relief aid, here is information about the child tax credit for up to $3,600 per child and details on who qualifies.

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