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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