The US is providing another set of tax refunds to Americans who received unemployment insurance benefits last year and may have overpaid taxes. The Internal Revenue Service announced Tuesday that it would send 4 million tax refunds the week of July 14th, with direct deposits going into people’s accounts that day and the agency sending paper checks out on Friday.
Refunds are for taxpayers who became unemployed last year and filed their 2020 statements before mid-March, when President Joe Biden’s American bailout plan stipulated that up to $ 10,200 would be paid in unemployment benefits would not be taxable.
Since unemployment benefits are subject to federal income tax for most years, the tax law change has resulted in millions of people receiving reimbursement. The IRS estimates that up to 13 million people are eligible for a payment. This is the third round of refunds the agency is issuing after issuing similar ones Payments in May and June.
The average payment is $ 1,265, according to the IRS. This means that some taxpayers get more and some less. But taxpayers who owe money elsewhere may not see a refund even if they are supposed to get one.
“For taxpayers who have overpaid, the IRS will either refund the overpayment, apply it to other outstanding taxes or other federal or state debt owed,” the agency said.
How do you qualify?
Taxpayers who may have overpaid their taxes will not need to take any action to correct their tax refund, the IRS said. The agency said it is reviewing tax returns and sending out refunds in batches.
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The IRS started with the simplest of declarations – those filed by single taxpayers – and will then move on to the declarations filed by married couples and heads of household.
Refunded taxpayers who have provided their banking information to the IRS when filing their tax returns will receive the money through direct deposit; Eligible persons who have not given bank details will receive a paper check in the mail.
Do you have to submit an amended declaration?
Most taxpayers do not need to submit new documents to receive their refund. However, if a taxpayer has a loved one and receiving unemployment benefits from last year’s total income falls below the income tax credit threshold, they will need to file an amended declaration to claim the tax credit, the IRS said.
This doesn’t apply to individual taxpayers who are eligible for the loan – the IRS will automatically adjust their tax returns, the agency said.
To be eligible for the EITC, a parent of a child can earn a maximum of $ 41,000 as a single person or $ 47,000 if they are married. The limits increase with more children.