Final corrections for taxpayers who overpaid their taxes on unemployment compensation received in 2020 have been completed by the IRS. Approximately 14 million returns were corrected, resulting in nearly 12 million refunds totaling $14.8 billion.
Refunds for Nontaxable Unemployment Compensation
The IRS is automatically refunding money to eligible people who filed their tax returns reporting unemployment compensation before the recent changes made by the American Rescue Plan.
Highlights of the American Rescue Plan Act Information
Signed into law on March 11, 2021, the American Rescue Plan Act (ARPA) contains several tax provisions affecting individuals and families. Let’s take a look:
Unemployment Benefits Identity Theft Scam Alert
During 2020, millions of taxpayers were impacted by the COVID-19 pandemic through job loss or reduced work hours. Some taxpayers who faced unemployment or reduced work hours applied for and received unemployment compensation from their state. As a reminder, unemployment benefits are taxable income and must be reported on tax returns.
Recordkeeping Tips for Individuals and Businesses
The key to avoiding headaches at tax time is keeping track of your receipts and other records throughout the year. Whether you use an excel spreadsheet, an app, an online system or keep your receipts organized in a folding file organized by month, good record-keeping will help you remember the various transactions you made during the year.
COVID Job Loss Could Affect Your Tax Situation
If you’ve lost your job you may have questions about how it could affect your tax situation. Here are some answers: