Could more cash be coming your way?
On Nov. 1, 2021, $510 million in refunds was sent out by the IRS to around 430,000 American citizens. This is money that went to employees who were out of work during the course of the covid-19 pandemic.
These refunds which totaled about 430,000 which were recently sent are the latest in a long line of payments the agency has been sending to workers who were out of work last year. Over $14.4 billion in all has been sent out in more than 11.7 million refunds during the course of this year. More cash may be forthcoming as the Internal Revenue Service continues to process last year’s tax returns.
Let’s look at who got the newest payments — and who might be entitled to get cash in their checking accounts in the future.
Here’s why the IRS is mailing out billions
The IRS is giving billions of dollars worth of refunds because millions of people ended up having to pay taxes on unemployment benefits last year that was not actually taxable. Those people are entitled to have this cash returned to them.
Under normal circumstances, unemployment benefits are subject to income taxes. But, the American Rescue Plan Act — the covid-19 relief law that passed early this year — excluded $10,200 in unemployment funds from federal taxes for single and couples that have adjusted gross income below $150,000.
Democrats’ American Rescue Plan Act was not passed until March of 2021. Many Americans had already filed their tax returns by the time it had passed. People who filed returns before the act passed likely paid taxes on all received unemployment benefits that the new rules exempted from those taxes. The Internal Revenue Service is making changes to tax returns and automatically fixing them so it can send out the cash that people overpaid.
About 16 million taxpayers may be entitled to receive a refund of the taxes they improperly gave on unemployment funds, and the IRS has been slowly pushing through the process of sending the checks to those who are owed it. This latest round of 430,000 refunds was part of their newest effort to return money to Americans out of work during the Corona pandemic.
Americans who received these tax refunds got an average around $1,189 from the IRS. The agency has said this group of people are likely one of the last to get checks, as they are almost done processing all of the tax returns that could be affected by this issue.
Author: Scott Dowdy