Trending

IRS sends out new batch of corrected tax returns; refunds averaging nearly $1,200

The Internal Revenue Service announced Monday that it has sent out 430,000 tax refunds averaging around $1,189 to those who overpaid taxes on 2020 unemployment benefits.

>> Read more trending news

The refunds are for taxes paid on unemployment insurance before the American Rescue Plan Act became law in March and excluded up to $10,200 in unemployment compensation from taxable income calculations.

The IRS has been reviewing forms 1040 and 1040SR to identify those who are due an adjustment to their refund because of the overpayment.

Those who have overpaid unemployment compensation taxes generally do not need to contact the agency about the overpayment, because it is already reviewing affected tax returns.

To date, the IRS has issued more than 11.7 million refunds for overpaid taxes on unemployment benefits, totaling $14.4 billion. According to the agency, there will be one more batch of corrected returns issued by the end of the year.

If your return is being corrected, you will generally receive letters from the IRS within 30 days of the adjustment. The letters tell taxpayers what kind of adjustment was made (refund, payment of IRS debt payment or payment offset for other authorized debts) and the amount of the adjustment.

The IRS also is making corrections for Earned Income Tax Credit, Additional Child Tax Credit, American Opportunity Credit, Premium Tax Credit and Recovery Rebate Credit amounts affected by the exclusion.

Latest Trending