The Internal Revenue Service (IRS) has made 12 million refunds amounting to $15 billion. The average was around $1,232 each. This was done after the correction of taxes filed in 2020.
IRS reviewed 1040 and 1040-SR forms from the tax year 2020 filed before March 2021, i.e., before the signing of the American Rescue Plan.
Who is eligible for IRS refunds?
The IRS said the American Rescue Plan excluded up to $10,200 unemployment compensation in 2020. They reported that the exclusion only applied to married couples and individuals whose adjusted gross income came under the bracket of $150,000.
“To ease the burden on taxpayers, the IRS took steps to review the Forms 1040 and 1040-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 Internal Revenue Service also adjusted the Recovery Rebate Credit, Earned Income Tax Credit, Additional Child Tax Credit, Premium Tax Credit, Opportunity Tax Credit, and Advance Tax Credit. The taxpayers who have not received the corrected taxes from IRS and fall under the unemployment compensation exclusion can file amended tax returns for 2020 to claim credits and refunds. You can also visit the official website for details in this regard.
Unemployment tax refunds, the IRS is not sending 12 million refunds pic.twitter.com/OBMnLhqjB0
— Duke Alexander Moore, CTC, EA (@dukelovestaxes) January 10, 2023
While some taxpayers got refunds, others got overpayment applied to debts and taxes due. In some instances, the exclusion resulted in a reduction in adjusted gross income.
According to IRS, many Americans have still not received their 2021 federal stimulus payments and returns. The reason for this issue is hiring. As per a Government Accountability Office Report, the IRS had a backlog of 12.4 million returns.
If you’re a #TaxPro and receive more e-file acknowledgements from the #IRS than the number of returns you’ve filed, that’s a common sign of identity theft. Learn more at https://t.co/aSHk1nTsU1 #TaxSecurity pic.twitter.com/wULRQyijb2
— IRStaxsecurity (@IRStaxsecurity) January 13, 2023
For 2022 taxes, the IRS said that refunds might not be huge. Taxpayers won’t get additional stimulus payments in 2023 tax refunds as there were no Economic Impact Payments for 2022.
