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Archive for August 3rd, 2021

The IRS is continuing to issue unemployment compensation adjustment refunds

Tuesday, August 3rd, 2021

The IRS recently announced that another 1.5 million taxpayers will receive refunds as a result of the first $10,200 unemployment compensation not being taxable for certain qualified taxpayers. Many people who had unemployment compensation filed their tax returns before this was signed into law so they didn’t get the benefit. The IRS does not want people to amend their returns for this, they are making the adjustments and sending out any refunds due. Please keep in mind that not everyone qualifies for this benefit, it only applies to individuals and married couples whose modified adjusted gross income was less than $150,000 in 2020.

This round of refunds started on July 28 for direct deposit and paper checks began to be mailed out on July 30th. If you have an outstanding balance with the IRS, they may apply your refund to that instead of giving the money to you.

The IRS does give a few situations where you should amend your tax return instead of having the IRS correct it for you:

• did not submit a Schedule 8812 with the original return to claim the Additional Child Tax Credit and are now eligible for the credit after the unemployment compensation exclusion;
• did not submit a Schedule EIC with the original return to claim the Earned Income Tax Credit (with qualifying dependents) and are now eligible for the credit after the unemployment compensation exclusion;
• are now eligible for any other credits and/or deductions not mentioned below. Make sure to include any required forms or schedules.

The IRS will send a letter to the taxpayer within 30 days of the adjustment explaining what change was made.

The information provided in this blog does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available in this article are for general informational purposes only.  Information on this website may not constitute the most up-to-date legal or other information. Please consult your tax advisor on all the above issues.