The 2.3 million coronavirus stimulus checks that were issued earlier this week by the Internal Revenue Service may be on the minds of many struggling Americans—but make sure not to forget about the nearly three million refunds from 2020 unemployment benefits.
To date, the tax agency has confirmed that it has reviewed more than 3.1 million returns, with 2.8 million of them green-lighted for the potentially sizeable payments.
Take note that if people are still waiting on theirs, the checks could still be in transit and may enter their mailboxes within the next few days. For others, know that the IRS plans to disburse the next batch of refunds in mid-June.
Also, be aware that married couples who file a joint tax return may have to wait even longer than individual taxpayers due to the higher complexity of calculating their respective refunds, which are expected to head out later this summer.
For most people still without the refunds, the best course of action is to wait patiently. The IRS has already confirmed that it will automatically adjust tax returns if individuals qualify for the unemployment refund.
“Because the (approval of the refund) occurred after some people filed their taxes, the IRS will take steps in the spring and summer to make the appropriate change to their return, which may result in a refund,” the IRS said.
In its most recent release, the agency noted that “taxpayers will receive letters from the IRS, generally within thirty days of the adjustment, informing them of what kind of adjustment was made (such as refund, payment of IRS debt payment or payment offset for other authorized debts) and the amount of the adjustment.”
The IRS has estimated that roughly ten million Americans likely overpaid on their unemployment taxes last year and could be set to receive refunds. But since many had already filed their tax returns before the law change, estimates are as high as thirteen million.
Thanks to President Joe Biden’s $1.9 trillion American Rescue Plan, these newest cash windfalls are from the waiving of federal tax on up to $10,200 of unemployment benefits—or $20,400 for married couples filing jointly—that were received by taxpayers last year.
Do keep in mind that millions of Americans could also potentially be in line to receive unemployment tax refunds from their respective states as well. It is up to the state governments on how the payments will be disbursed to their respective residents.
Meanwhile, twenty-five states have indicated that they are withdrawing early from the federally run enhanced $300 weekly unemployment benefits program. Alaska, Iowa, Mississippi, and Missouri will be the first to opt out when it officially takes effect on June 12.
Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.