(WJW) – The Internal Revenue Service is sending nearly 12 million tax refunds to taxpayers after corrections made to their 2020 tax returns.
The refunds, totaling $14.8 billion and averaging about $1,232 each, were sent to taxpayers who overpaid on unemployment compensation in 2020.
According to the IRS, the American Rescue Plan Act of 2021, which President Joe Biden signed into law in March 2021, excluded “up to $10,200 in unemployment compensation from taxable income calculations.”
This impacted single taxpayers and married couples whose modified adjusted gross income were less than $150,000 in 2020.
The IRS has since been reviewing Forms 1040 and 1040-SR filed before the American Rescue Plan Act became law.
The IRS says it fixed about 14 million returns, but some taxpayers’ overpayment funds went directly toward taxes due or other debts.
Affected taxpayers should receive an email about the corrections. The IRS stresses keeping the letter for tax records.
However, eligible taxpayers who didn’t get a correction from the IRS might have to file an amended 2020 tax return to claim the refund.
Learn more at the IRS website.