The Internal Revenue Service said on Wednesday, it plans to take steps to automatically refund money starting in May and continuing through the summer to taxpayers who filed tax returns reporting unemployment compensation prior to recent changes under the ‘American Rescue Plan’.
The COVID relief package, which President Biden signed into law this month, enables taxpayers who earned under $150,000 in modified adjusted gross income to exclude unemployment compensation up to $20,400 if they’re married filing jointly, or $10,200 for all other eligible taxpayers. The relief package excludes only 2020 unemployment benefits. However, that change happened after some people already filed their taxes early this season, so the IRS said it will take steps in the spring and summer to figure out the appropriate change to their return, and that could result in a refund.
The first refunds are anticipated to go out in May and will continue into the summer.
We will continue to keep you posted on this and other important developments, but please contact your MSPC advisor in the meantime should you have any questions.