Run to the ATM Right Now: IRS Issues Millions of New Tax Refunds

Run to the ATM Right Now: IRS Issues Millions of New Tax Refunds

The IRS announced last week that it was sending close to three million tax refunds to “taxpayers who paid taxes on unemployment compensation that new legislation now excludes as income.”

The IRS announced last week that it was sending close to three million tax refunds to “taxpayers who paid taxes on unemployment compensation that new legislation now excludes as income.”

This came about as a direct result of the American Rescue Plan Act, which passed in March of 2021, which among other provisions “excluded up to $10,200 in unemployment compensation per taxpayer paid in 2020,” the IRS said. And 2.8 million of those refunds were sent out last week.

“IRS efforts to correct unemployment compensation overpayments will help most affected taxpayers avoid filing an amended tax return,” the IRS said in its announcement. “So far, the IRS has identified 13 million taxpayers that may be eligible for the adjustment. Some will receive refunds, which will be issued periodically, and some will have the overpayment applied to taxes due or other debts. For some there will be no change.”

The payments followed a "programming review” of tax returns filed last year. The IRS has reviewed 3.1 million returns, and sent refunds to 2.8 million of those taxpayers. The next set of refunds is set to go out in mid-June. Corrections will also be made for the Earned Income Tax Credit, Premium Tax Credit and Recovery Rebate Credit.

The IRS had been issuing weekly reports about the progress of distribution of the $1,400 stimulus checks from the American Rescue Plan, but didn’t for two weeks, prior to the announcement on May 26 that 1.8 million additional Economic Impact Payments had gone out, reaching a total of nearly 167 million, with a total cash value of  $391 billion. Since the American Rescue Plan Act allocated just over $400 million for stimulus checks, it’s an indication that the government is nearly done sending out those checks.

In addition, most of the payments from the May 26 round were either plus-up payments, or what the IRS described as having gone to “eligible individuals for whom the IRS previously did not have information to issue an Economic Impact Payment but who recently filed a tax return.”

Meanwhile, it looks like there won’t be any more stimulus checks like that, at least not the way they did in the American Rescue Plan and the other packages that passed earlier in the pandemic, in 2020.

“We'll see what members of Congress propose, but those are not free,” White House Press Secretary Jen Psaki said in the White House briefing room earlier this spring, when asked about plans for more checks. ”If passed, the families of tens of millions of children will continue to get regular payments,” Psaki said in the same briefing of the American Families Plan.

Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.