Unemployment tax break refund turbotax12/14/2023 For more information about this, including eligibility requirements, taxpayers should read the 2020 Unemployment Compensation Exclusion FAQs on IRS.gov. Taxpayers should not file an amended return if they previously filed one claiming the exclusion. If a taxpayer is eligible for the unemployment compensation exclusion and their account was not corrected by the IRS, they may need to file an amended 2020 tax return to claim the exclusion and any applicable non-refundable or refundable credits impacted by the exclusion. Many of the adjustments included corrections to the: This resulted in nearly 12 million refunds totaling $14.8 billion, with an average refund of $1,232. The IRS corrected approximately 14 million returns. Taxpayers should keep that letter with their tax records. The IRS mailed a letter to these taxpayers to inform them of the corrections. In some cases, the exclusion only resulted in a reduction in their adjusted gross income. Some taxpayers received refunds, while others had the overpayment applied to taxes due or other debts. The IRS determined the correct taxable amount of unemployment compensation and tax. To ease the burden on taxpayers, the IRS took steps to review the Forms 10-SR that were filed prior to the law's enactment to identify taxpayers who had already reported unemployment compensation as income and were eligible for the correction. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000. The American Rescue Plan Act of 2021, which became law in March 2021, excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations (up to $10,200 for each spouse if married filing joint). WASHINGTON - The Internal Revenue Service recently completed the final corrections of tax year 2020 accounts for taxpayers who overpaid their taxes on unemployment compensation they received in 2020.
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