Unemployment Tax Refund Problem: When Will You Get Paid?
It appears that millions of Americans are growing more frustrated by the day over the delay in getting their hands on the tax refunds from 2020 unemployment benefits.
Both the Internal Revenue Service and the Treasury Department certainly have done a wonderful job in issuing nearly one hundred seventy million coronavirus stimulus checks over the past two months under the American Rescue Plan.
But it appears that millions of Americans are growing more frustrated by the day over the delay in getting their hands on the tax refunds from 2020 unemployment benefits.
These potentially sizeable monetary payments were slated to start landing in eligible bank accounts this month—but most Americans have yet to see a dime from the government. More troubling is the fact that the IRS has been mostly unresponsive to the concerns and has provided few updates on the matter. There is no official count of how many of these refunds have been sent out to date.
Meanwhile, frustrated Americans counting on these checks are taking action. Some have launched Twitter and other social media pages to keep tabs on the IRS regarding when eligible taxpayers can expect to receive the money that they are entitled to.
Take note that these payments are from President Joe Biden’s $1.9 trillion stimulus bill, which waived federal tax on up to $10,200 of unemployment benefits—or $20,400 for married couples filing jointly—that were collected last year. According to the IRS, unemployment benefits are typically treated as taxable income.
The agency added that as many as ten million U.S. taxpayers likely overpaid on their unemployment taxes and would be in line for the refunds. Current estimates are suggesting that for single taxpayers who are eligible for the $10,200 tax break and fit into the 22 percent tax bracket, they would receive $2,200. For eligible married couples, that amount would double.
To make life easier for those who have already filed their tax returns, the IRS also recently confirmed that it will automatically adjust their respective returns if individuals qualify for a refund.
“Because the change occurred after some people filed their taxes, the IRS will take steps in the spring and summer to make the appropriate change to their return, which may result in a refund,” the IRS said. “The first refunds are expected to be made in May and will continue into the summer. Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed.”
Also, be aware that married couples who file a joint tax return may have to wait longer than individual taxpayers due to the higher complexity of calculating their refunds. The payments are expected to be issued in two separate phases—and currently, it appears that most married couples who filed jointly will be part of the second phase. There are no details yet on when that phase will start.
Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.