The IRS reimbursed the wrong amount to some taxpayers who received unemployment benefits in 2020.
BUFFALO, NY – Questions about unemployment benefits have been a constant during the pandemic, and many of the most recent questions 2 On Your Side asked are about taxes.
In March, after many people filed their 2020 tax returns under the US bailout, the federal government said that if your gross adjusted income is below $ 150,000, you won’t have to pay tax on unemployment benefits worth up to $ 10,200 or double for married people per year. That meant the IRS might owe more than $ 10 million in tax dollars.
Paula S. emailed 2 On Your Side saying, “I wonder when we can expect our unemployment refund. We paid the taxes … still haven’t received a refund.”
These refunds started in May.
But as 2 On Your Side reported last week, some people got too much money back. In some cases, thousands of dollars too much.
Since 2 On Your Side spoke to the Vice President of EG Tax last week, EG Tax has found that only married couples filing together will contact them about overpayments.
A representative from software company EG Tax says the IRS told them this …
“We, we mean the IRS, couldn’t find out if both spouses were unemployed, so we automatically calculated how they were both unemployed. Software company said,” Well, are you going to charge these people the extra money? And they said no at that point. We don’t know what we’re going to do because we’ve built in mistakes. If you contact us, you have to pay it back, “says Christopher Fabian, VP of EG Tax.
Fabian struggled to get in touch with the IRS as his clients had questions.
“How is that fair to the people who submitted after March 17th, who only get the correct deduction? You know? They almost have to change the tax law again, and that’s just amazing,” says Fabian.
2 On Your Side contacted the IRS on Monday.
A spokesman told us that he would contact us to verify that the information provided by EG Tax is correct. We checked in with them again on Tuesday afternoon and they said they were still working to get us information. We didn’t get any feedback by our Tuesday deadline, but EG Tax offers this tip in case the IRS wants their money back.
“We advise our customers, don’t spend the extra money,” said Fabian.