Will the IRS ship out extra unemployment tax refunds this fall? What to know

Summer's over. Where's your unemployment tax refund from the IRS?

The IRS has despatched 8.7 million unemployment compensation refunds to this point.

Angela Lang/CNET

This summer season, the IRS began making changes on 2020 tax returns and issuing refunds averaging round $1,600 to those that qualify for a $10,200 unemployment tax break. The tax company mentioned changes could be made all through the summer season, however the final batch of refunds — which went out to some 1.5 million taxpayers — was two months in the past. No rounds of funds appear to have gone out final month, and it is already October. 

This is a abstract of what these refunds are about: The first $10,200 of 2020 jobless advantages ($20,400 for married {couples} submitting collectively) was made nontaxable revenue by the American Rescue Plan in March, so taxpayers who filed their returns earlier than the laws and paid taxes on these advantages are due a reimbursement. 

Although some have reported on-line that their tax transcripts present pending deposit dates, others have not acquired any clues in any respect. Many are questioning easy methods to get a reside agent to ask with questions or if they need to file an amended return. The IRS’ large backlog of unprocessed returns does not assist the matter. The tax company can also be busy sending out stimulus funds, youngster tax credit score checks and adjusting late 2020 tax returns. 

We’ll inform you easy methods to entry your IRS tax transcript and why it’s best to look out for an IRS TREAS 310 transaction in your financial institution assertion. For different information, pandemic-era jobless assist — together with the $300 weekly bonus funds and protection for freelancers — ended on Labor Day. If you happen to’re a dad or mum receiving the kid tax credit score this yr, take a look at the way it might have an effect on your taxes in 2022. This story has been up to date lately.

What to know in regards to the unemployment tax break

The very first thing to know is that refunds would solely go to taxpayers who acquired jobless advantages final yr and paid taxes on that cash earlier than the availability within the American Rescue Plan Act of 2021. The tax break is for individuals who earned lower than $150,000 in adjusted gross revenue and for unemployment insurance coverage acquired throughout 2020. At this stage, unemployment compensation acquired this calendar yr will probably be totally taxable on 2021 tax returns. 

The $10,200 tax break is the quantity of revenue exclusion for single filers, not the quantity of the refund (taxpayers who’re married and submitting collectively may very well be eligible for a $20,400 tax break). The quantity of the refund will range per individual relying on general revenue, tax bracket and the way a lot earnings got here from unemployment advantages. To this point, the refunds have averaged greater than $1,600. 

Nevertheless, not everybody will obtain a refund. The IRS can seize the refund to cowl a past-due debt, reminiscent of unpaid federal or state taxes and youngster assist. One technique to know if a refund has been issued is to attend for the letter that the IRS is sending taxpayers whose returns are corrected. These letters, issued inside 30 days of the adjustment, will inform you if it resulted in a refund or if it was used to offset debt. 

If the IRS continues issuing refunds, they’ll exit as a direct deposit should you supplied checking account data in your 2020 tax return. A direct deposit quantity will probably present up as IRS TREAS 310 TAX REF. In any other case, the refund will probably be mailed as a paper test to no matter tackle the IRS has available. 

The IRS has put collectively a FAQ web page when you have questions on eligibility. The IRS says eligible people ought to’ve acquired Kind 1099-G from their state unemployment company exhibiting in Field 1 the whole unemployment compensation paid in 2020. (If you happen to did not, it’s best to request one on-line from that company.) Some states might difficulty separate kinds relying on the jobless advantages — for instance, should you acquired federal pandemic unemployment help, or PUA. 

IRS schedule for unemployment tax refunds

With the most recent batch of funds in July, the IRS has now issued greater than 8.7 million unemployment compensation refunds totaling over $10 billion. The IRS introduced it was doing the recalculations in phases, beginning with single filers with no dependents after which for individuals who are married and submitting collectively. The primary batch of those supplemental refunds went to these with the least sophisticated returns in early summer season, and batches are alleged to proceed for extra sophisticated returns, which might take longer to course of. 

In response to an igotmyrefund.com discussion board and one other dialogue on Twitter, some taxpayers who filed as head of family or as married with dependents began receiving their IRS cash in July or getting updates on their transcript with dates in August and September. No different official information from the IRS has been issued concerning fee schedule. 

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How to track your refund and check your tax transcript

The first way to get clues about your refund is to try the IRS online tracker applications: The Where’s My Refund tool can be accessed here. If you filed an amended return, you can check the Amended Return Status tool. 

If those tools don’t provide information on the status of your unemployment tax refund, another way to see if the IRS processed your refund (and for how much) is by viewing your tax records online. You can also request a copy of your transcript by mail or through the IRS’ automated phone service by calling 1-800-908-9946. 

Here’s how to check your tax transcript online:

1. Visit IRS.gov and log in to your account. If you haven’t opened an account with the IRS, this will take some time as you’ll have to take multiple steps to confirm your identity.

2. Once logged in to your account, you’ll see the Account Home page. Click View Tax Records.

3. On the next page, click the Get Transcript button.

4. Here you’ll see a drop-down menu asking the reason you need a transcript. Select Federal Tax and leave the Customer File Number field empty. Click the Go button.

5. The following page will show a Return Transcript, Records of Account Transcript, Account Transcript and Wage & Income Transcript for the last four years. You’ll want the 2020 Account Transcript

6. This will open a PDF of your transcript: Focus on the Transactions section. What you’re looking for is an entry listed as Refund issued, and it should have a date in late May or June. 

If you don’t have that, it likely means the IRS hasn’t gotten to your return yet. 

Most don’t have to file an amended return

Most taxpayers don’t need to file an amended return to claim the exemption. If the IRS determines you are owed a refund on the unemployment tax break, it will automatically correct your return and send a refund without any additional action from your end. 

The only reason to file an amended return is if the calculations now make you eligible for additional federal credits and deductions not already included on your original tax return, like the Additional Child Tax Credit or the Earned Income Tax Credit. If you think you’re now eligible for deductions or credits based on an adjustment, the most recent IRS release has a list of people who should file an amended return. 


The average IRS refund for those who paid too much tax on jobless benefits is $1,686. 

Sarah Tew/CNET

What to know about 971, 846, 776 and 290 transcript codes

Some taxpayers who’ve accessed their transcripts report seeing different tax codes, including 971 (when a notice was issued), 846 (the date and amount of a refund) and 776 (the amount of additional interest owed by the IRS). Others are seeing code 290 along with “Additional Tax Assessed” and a $0.00 amount. Since these codes could be issued in a variety of instances, including for stimulus checks and other tax refunds or adjustments, it’s best to consult the IRS or a tax professional about your personalized transcript. 

How to call the IRS if you’re waiting on a refund

It’s best to locate your tax transcript or try to track your refund using the Where’s My Refund tool (mentioned above). The IRS says that you can expect a delay if you mailed a paper tax return or had to respond to the IRS about your electronically filed tax return. The IRS makes it clear not to file a second return. 

The IRS says not to call the agency because it has limited live assistance. The agency is juggling the tax return backlog, delayed stimulus checks and child tax credit payments. Even though the chances of speaking with someone are slim, you can still try. Here’s the best number to call: 1-800-829-1040. 

What else to know about unemployment tax refunds

The IRS has provided some information on its website about taxes and unemployment compensation. But we’re still unclear on the timeline for payments, which banks get direct deposits first or who to contact at the IRS if there’s a problem with your refund. 

Some states, but not all, are adopting the unemployment exemption for 2020 state income tax returns. Because some get full tax unemployment benefits and others don’t, you might have to do some digging to see if the unemployment tax break will apply to your state income taxes. This chart by the tax preparation service H&R Block could give some clues, along with this state-by-state guide by Kiplinger

Here is information about the child tax credit for up to $3,600 per child and details on who qualifies.

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