Unemployment tax refund replace: 10 things to know about your IRS money

The IRS has despatched 8.7 million unemployment compensation refunds to date.

Angela Lang/CNET

If you paid taxes on your 2020 unemployment advantages and filed your tax return early this 12 months, you can be getting an even bigger refund than you anticipated. Here’s why: The first $10,200 of 2020 jobless benefits, or $20,400 for married {couples} submitting collectively, was made nontaxable earnings by the American Rescue Plan in March. The IRS has been making changes on tax returns and issuing refunds averaging $1,686 to those that are eligible for that tax break. 

The irritating factor is that the dates for the refunds are unclear. The final batch of funds, which went out to some 1.5 million taxpayers, was over a month in the past. The IRS has not issued any information about a timeline, besides to say “summer,” which formally ends Sept. 22. While some have reported on social media that they’ve pending refund dates on their IRS tax transcripts, many other taxpayers are fed up as a result of they have not obtained any money or updates in any respect. 

If you are still questioning the place your refund is, we’ll clarify how to entry your tax transcript on-line for clues. We’ll let you know why to look out for an IRS TREAS 310 transaction on your financial institution assertion or an 846 code on your transcript. For different unemployment information, try the most recent on $300 weekly bonus payments ending this weekend. And here is how the kid tax credit score could affect your taxes in 2022. This story has been up to date.

Key things to know about 2020 unemployment tax refunds 

In late May, the IRS began sending refunds to taxpayers who obtained jobless advantages in 2020 and paid taxes on that money earlier than the supply within the American Rescue Plan waived taxes on up to $10,200 in unemployment insurance coverage advantages for people incomes lower than $150,000 a 12 months. With the most recent batch of funds in July, the IRS has now issued greater than 8.7 million unemployment compensation refunds totaling over $10 billion. 

The first batch of those supplemental refunds went to these with the least sophisticated returns (single taxpayers with no dependents), and batches are supposed to proceed all through the summer season for extra sophisticated returns. On July 13, the IRS stated it despatched out 4 million extra funds through direct deposit and paper test, and one other 1.5 million went out beginning July 28. 

According to an igotmyrefund.com forum and one other dialogue on Twitter, some taxpayers who filed as head of family or as married with dependents began receiving their IRS money in July or getting updates on their transcript with dates in August and September. 

Here’s a fast recap of what we know:

  • The tax break is barely for individuals who earned lower than $150,000 in adjusted gross income and for unemployment insurance coverage obtained through the pandemic in 2020. 
  • The $10,200 is the quantity of earnings exclusion for single filers, not the quantity of the refund. The quantity of the refund will fluctuate per particular person relying on general earnings, tax bracket and the way a lot earnings got here from unemployment advantages.
  • Most taxpayers don’t need to file an amended return to declare the exemption. But should you suppose you are now eligible for deductions or credit primarily based on an adjustment, test 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 should mechanically appropriate your return and ship a refund with none further motion from your finish. 
  • Not everybody will obtain a refund. The IRS can seize the refund to cowl a past-due debt, reminiscent of unpaid federal or state taxes and little one assist. 
  • Refunds started going out in May and can exit in batches by 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 should you supplied checking account data on your 2020 tax return. A direct deposit quantity will probably present up as IRS TREAS 310 TAX REF. Otherwise, the refund shall be mailed as a paper test to no matter handle the IRS has 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 earnings tax returns. 

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How to check your refund status on your IRS transcript

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 way 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 IRS.gov 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 in to 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. 


The average IRS refund for those who paid too much tax on jobless benefits is $1,686. 

Sarah Tew/CNET

IRS tax transcript codes decoded: 971, 846 and 776

Some taxpayers who’ve accessed their transcripts report seeing different tax codes, including 971 (when a notice was issued), 846 (the date and amount of a refund) and 776 (the amount of additional interest owed by the IRS). Others are seeing code 290 along with “Additional Tax Assessed” and a $0.00 amount. Since these codes could be issued in a variety of instances, including for stimulus checks and other tax refunds or adjustments, it’s best to consult the IRS or a tax professional about your personalized transcript. 

What to do if you’re waiting on your unemployment refund

It’s best to locate your tax transcript or try to track your refund using the Where’s My Refund tool (mentioned above). The IRS says that you can expect a delay if you mailed a paper tax return or had to respond to the IRS about your electronically filed tax return. The IRS makes it clear not to file a second return: You should call if it’s been more than three weeks since your last update.

Keep in mind that the IRS has limited live assistance because the agency is juggling the tax return backlog, delayed stimulus checks and child tax credit payments. Even though the chances of speaking with someone are slim, you can still call. Here’s the best number to call: 1-800-829-1040. 

Unknown details about the unemployment tax break 

The IRS has only provided limited information on its website about taxes and unemployment compensation. We’re still unclear on the future timeline for payments during the coming months, which banks get direct deposits first or who to contact at 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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