If you received money from the IRS, first of all—congratulations. A little extra cash can feel good, especially when it isn't expected. But before you get all excited, you might want to know why the IRS sent you money in the first place.
There are a few possibilities that could answer why you received money from the IRS.
You might have received a plus-up payment from the IRS
As of June 9, eight million Americans have received a plus-up payment from the IRS.
A plus-up payment is an extra payment that the government sends to people who already received all three stimulus checks, but received less than they were supposed to.
Someone can receive a plus-up payment if their income was reported incorrectly like being above the earnings threshold for stimulus payouts. For example, the person might have had a higher income in 2019, and after filing 2020 taxes, the tax bracket was lower.
Alternatively, you might have gained a dependent in 2020, which means that you're due for extra stimulus money.
It's important to determine if you fall into this category. If so, your surprise IRS payment likely has to do with the plus-up payment system.
The IRS might have sent your unemployment tax repayment
If you received unemployment benefits at any point in 2021 and filed your taxes before March 11 or automatically removed taxes from your unemployment benefits at the time of receipt, you paid taxes on your unemployment that turned out to be unnecessary for the 2020 tax year. The American Rescue Plan Act says that the IRS will refund up to $10,200 in unemployment taxes that were overpaid prior to the rule being put in place.
If you received an unexpected payment from the IRS and you don't qualify for a plus-up payment, the check is likely what you're owed for these unemployment tax payments. Don't expect this to carry over into the 2021 tax year, but that doesn't mean you can't enjoy it while it's here. With unemployment rates so high in 2020, the number of people receiving refunds for their paid taxes is impressive.
No payment yet, but you're expecting one? Here's what to do
If you think the IRS owes you a payment but you haven't received one, the best you can do is wait. Check your direct deposit bank account or wait for a check to come in the mail. The IRS is slow-going when it comes to repayments, but they're en route.
If you're waiting for an unemployment tax repayment, there's nothing you need to do on your part. The IRS says that it do this automatically on its time. Plus-up payments are also being sent out automatically to those who qualify.
The IRS tries to keep the public updated to quell inquiries from people through press releases and announcements.