The IRS is moving to issue refunds for Americans who paid taxes on $10,200 in unemployment benefits last year

Charles Rettig
IRS Commissioner Charles Rettig.

  • The IRS is aiming to issue refunds to people who already paid taxes on some unemployment insurance.
  • “We believe we will be able to automatically issue refunds associated with the $10,200,” Rettig told Congress.
  • The IRS recently extended the tax filing deadline from April 15 to May 17 for individuals.
  • See more stories on Insider’s business page.

The IRS chief said during a congressional hearing on Thursday that the agency is taking steps to issue refunds for people who paid taxes on the first $10,200 in jobless aid.

IRS Commissioner Charles Rettig urged taxpayers to refrain from filing an amended return. Instead, the organization is aiming to distribute refunds soon.

“We believe we will be able to automatically issue refunds associated with the $10,200,” Rettig told the House Ways and Means Committee. He added he expected a formal announcement “in the near future.”

The commissioner is referring to a part of President Joe Biden’s stimulus law that provides tax relief for unemployed workers. The first $10,200 in jobless aid is tax-free for Americans earning below $150,000, but some people may have filed taxes without claiming – or even knowing about – this exemption.

“We’re sensitive to the situation,” Rettig said.

The IRS recently extended the tax filing deadline by a month from April 15 to May 17 for individuals filing 1040 forms, providing some people with additional time to submit their returns. The extension doesn’t apply to corporate or nonprofit tax filings.

The agency is struggling to get through a massive backlog of 24 million unprocessed returns from businesses and individuals stretching back to the 2019 tax filing season – and it’s piling up as Americans continue turning in their taxes. Many stimulus checks from past relief laws have not gone out as a result.

“We would hope to be through this backlog by the summer,” Rettig said.

H&R Block and TurboTax customers, meanwhile, are grappling with other delays as neither company has updated software to apply the new stimulus law’s changes on taxing jobless benefits.

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Americans can start tracking the status of their $1,400 stimulus checks on Monday

stimulus check eligibility
  • The IRS said people can begin tracking the status of their payments on Monday.
  • The initial batch of $1,400 checks has started landing into people’s bank accounts.
  • The IRS is moving swiftly to send out the checks as part of Biden’s stimulus law.
  • See more stories on Insider’s business page.

Americans are starting to see $1,400 stimulus checks land in their bank accounts this weekend under President Joe Biden’s stimulus law. But people who don’t get a direct payment right away won’t be left unaware of its arrival for much longer.

The IRS said on Friday that people can begin tracking the status of their checks using the “Get my Payment” portal on Monday. The agency also said it expects to issue more direct deposits and send payments as a check or debit card over the coming weeks.

The IRS also said a payment date will be announced for beneficiaries of Social Security and other safety net programs.

Singles earning up to $75,000 in adjusted gross income qualify for the full amount, along with couples making up to $150,000. Each adult dependent is eligible for a check, a change from the first two rounds of stimulus payments.

People earning above those thresholds can still receive a smaller direct payment. But eligibility is capped for individuals earning more than $80,000 and joint filers making above $160,000. They’ll get zero.

The swift arrival of the federal payments underscore the IRS’s improving ability to get cash out the door quickly, especially for people with direct deposit information in their systems.

Last year, Congress and former President Donald Trump approved $1,200 stimulus checks for most taxpayers. Those government payouts started going out in two weeks.

Then in December, $600 checks started going out within days of Trump signing an earlier pandemic relief package. It took around a month and a half for the IRS to distribute 147 million payments.

Biden touted the direct payments during his first primetime address on Thursday evening, timed to the first anniversary of the nation’s pandemic lockdowns. He said a family of four earning $110,000 can expect to receive $5,600 in cash benefits.

The federal government estimates this batch of direct payments will cost $411 billion.

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