It’s safe to say that the recent global pandemic has affected our lives in all sorts of ways. It does not only affect our health, but it also affects our livelihoods.
Unemployment tax refunds have also changed because of the health pandemic caused by the Covid19 virus. The rules can be confusing and may people want to know “how much will my unemployment tax refund be?”
Below you’ll find a brief, to the point overview of the unemployment tax situation and see what the average refunds are.
How Much Will My Unemployment Tax Refund Be?
For starters, the Internal Revenue Services (IRS) has begun making adjustments regarding 2020 tax returns. They are issuing tax refunds whose average is around $1,600 for people qualifying for a $10,200 unemployment tax break.
The 2020 jobless benefits are $10,200 and $20,400 for married couples filing jointly. These benefits are made nontaxable income by the American Rescue Plan in March.
Who Is Eligible?
There are basically two groups of people eligible for these refunds. One are those who received the 2020 jobless benefits last year. The other are people who paid taxes before the provision of the 2021 American Rescue Plan.
The tax break is for people who earned an adjusted gross income of less than $150,000 as well as for unemployment insurance received during 2020.
However, the $10,200 tax break is the amount of income exclusion for single filers ($20,400 for married couples filing jointly).It is NOT the amount of the tax refunds.
How Much Are You Eligible For?
How big the tax refunds will be for eligible people will differ from person to person. It depends on your overall income, tax bracket, and the amount of earnings that came from unemployment benefits. The tax refunds have averaged over $1,600.
However, it’s important to know that not everyone eligible will receive their tax refunds. If the eligible person has debts, such as unpaid federal or state taxes or child support, then the IRS may use your tax refunds to pay your debts.
Where To Find More Information
For you to know if a tax refund is issued to you, it is always better to wait for a letter that the IRS sends to taxpayers whose returns are corrected. These letters will tell you if you will receive a tax refund or if it will be used to pay off your unpaid debts.
Taxpayers who have filed their tax returns prior to the legislation and those who paid taxes on those benefits are due money back. Some people have reported that their tax transcripts are showing pending deposit dates.
However, other people have not as they have not received any clues. As of now, the tax agency has a large accumulation of unprocessed tax returns.
The IRS is sending out stimulus payments, child tax checks, as well as adjusting late 2020 tax returns. So that is the basics of what you need to know about the 2020 tax refunds.
For further information, visit the IRS website here to get more information about these tax refunds.