The IRS has been sending out unemployment tax refunds since May. In its latest update, the tax agency said it had released more than $10 billion in jobless tax refunds to nearly 9 million Americans. Still, many are waiting for the IRS money and wondering when they'll get their refund.
The jobless tax refund average is $1,686, according to the IRS. In addition to the refund on unemployment benefits, people are waiting for their regular IRS tax refunds.
You may be frustrated by the refund delay because you’re waiting to put the money into use immediately. Some people plan to put the money toward stocks, cryptocurrencies, or a college education fund. Others may want to use the refund to pay off debt and protect their credit score.
Are you eligible for unemployment tax refund?
Jobless benefits are generally taxable. However, Congress made an exception for the 2020 tax year because of the COVID-19 pandemic, which caused job losses across the country.
As a result, jobless benefits up to $10,200 for individuals earning less than $150,000 per year are exempt from tax. Therefore, if you received unemployment income in 2020 and paid tax on that money, you might get a refund.
What do you need to do to get a jobless benefits tax refund?
The law that made up to $10,200 of jobless income exempt from tax took effect in Mar. 2021. Many people had already filed their tax returns by that time. For those early returns, the IRS is making adjustments from its side, and people don’t need to do anything to get the refund.
However, some people may need to file an amended tax return before the IRS will release the refund money to them. The agency may contact you if you need to revise your return to unlock the jobless tax refund.
When will I get my unemployment tax refund?
The IRS is releasing the unemployment tax refund in batches. The more complex your return is, the longer you may have to wait for a refund.
The IRS started with making payments to those who had filed simple returns, such as single filers. The agency is working its way down to the more complex category, and expects to complete releasing jobless tax refunds before Dec. 2021.
How will I receive the jobless tax refund?
The IRS is releasing the refunds directly to the bank accounts people shared with the tax agency. Other people will receive refund checks in their mailboxes. So, watch your bank account or mail, and use the Where’s My Refund tool on the IRS website or mobile app to check your refund status.