![]() The IRS announced on March 31 that the first of the amended payments were expected to go out in May, though an exact date has not been specified. H&R Block and TurboTax have updated their online tax-filing platforms to account for the tax. Taxpayers can see if they qualify for the EITC at IRS.gov. The new stimulus bill allows 10,200 in unemployment benefits paid in 2020 to be excluded from taxes. If you have not yet filed your return, tax software has been updated to reflect the changes with unemployment benefits, the IRS said. However, not everyone will receive a refund. So far, the refunds are averaging more than 1,600. ![]() The amount of the refund will vary per person depending on overall income, tax bracket and how much earnings came from unemployment benefits. “However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits but now are eligible because the exclusion changed their income.” The 10,200 tax break is the amount of income exclusion for single filers, not the amount of the refund. “For example, the IRS can adjust returns for those taxpayers who claimed the Earned Income Tax Credit (EITC) and, because the exclusion changed the income level, may now be eligible for an increase in the EITC amount which may result in a larger refund,” the IRS said. The IRS will not automatically amend their return and issue a refund. In the case of married individuals filing a joint Form 1040 or 1040-SR, this exclusion is up to 10,200 per spouse. About 30 days after receiving your refund you’ll receive a letter from the IRS with details about the unemployment adjustment. The American Rescue Plan Act of 2021 authorizes individual taxpayers to exclude up to 10,200 of unemployment compensation they received in tax year 2020 only. To date, the IRS has identified more than 16 million taxpayers who are eligible and has issued. If a person falls into that category, they will have to file an amended return to get the additional money. The IRS will start with most taxpayers who are eligible for the up to 10,200 unemployment compensation exclusion first, then look to Married Filing Jointly filers who are eligible to exclude up to 20,400. ARP provided a tax break of up to 10,200 to those who received unemployment compensation in 2020. The credit lowers the amount of taxes a person owes. One consequence of the exemption is that it may make some eligible for an Earned Income Tax Credit. “The IRS will recompute any credits and deductions claimed on the original return,” the IRS website explains.
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