2020 Tax Refunds Are Being Issued for Some Unemployment Compensation

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The IRS is issuing refunds to many people who reported unemployment compensation on their 2020 returns. The last COVID relief law allowed individuals to exclude up to $10,200 of their unemployment compensation from their taxable income on their 2020 returns. Since many people had already filed 2020 returns reporting their unemployment compensation, the IRS announced that they would automatically issue refunds to most of these people.

In the last two months, the IRS has issued over 8 million refunds for unemployment compensation. The IRS is issuing these refunds in batches: starting with the simplest returns and then, more complex returns. 

The IRS is still issuing more refunds. If you're expecting a refund for unemployment compensation, please monitor the Where's My Refund tool (https://www.irs.gov/refunds) and expect a notice from the IRS when you get your refund. Please know too that 2020 refunds are taking an unusually long time to process. PLA's Taxpayer Support Clinic is here to answer questions and help.

There are some people who did need to file an amended return because of the unemployment exclusion. These individuals include people who didn't claim Earned Income Credit, have qualifying children, and now qualify for Earned Income Credit because of the unemployment exclusion. We provided more information previously on this here: https://philalegal.org/news/tip-unemployment-claimants-who-did-not-claim-earned-income-tax-credi