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Monday, February 6, 2023

2020 Unemployment Benefits Amended By The IRS

12 million Americans who were eligible for a tax credit on unemployment benefits received during the first year of the COVID-19 outbreak have received their delayed tax refunds from the IRS.

The organization stated in a news release this week that it modified 14 million tax returns for the 2020 filing season. It provided refunds of around $14.8 billion, with a $1,232 average per return.

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Many Americans have already filed their tax returns for the year since President Joe Biden did not sign the legislation into law until March 2021.

Apply For Unemployment Benefits 

Unemployment benefits, including any additional money given out through federal aid programs, are considered taxable income by both the federal government and the majority of states. Taxes aren’t routinely taken from unemployment benefits like they are from regular paychecks, which could cause return shock for millions of Americans who are unemployed despite having lost their jobs. You can choose to withhold federal and state taxes (if appropriate), but a lot of taxpayers either aren’t aware of this choice or decide not to. According to The Century Foundation, almost 40 million people received unemployment benefits in 2020. The typical recipient of benefits received $14,000.

A taxpayer should file an updated return if they are entitled to the unemployment benefit exclusion but their refund was not adjusted by the IRS. Taxpayers should not file another updated return if they already did so and claimed the exclusion.

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To file an amendment and request a refund, you have three years from the time you submitted your first return or two years from the time you paid any taxes owed, whichever comes first.

Other tax credits, such as the earned income tax credit, recovery rebate tax credit, additional child tax credit, premium tax credit, and advanced tax credit were also adjusted by the IRS in 2020.

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