IRS TO ISSUE 12 MILLION REFUNDS

IRS TO ISSUE 12 MILLION REFUNDS

IRS to issue 12 million refunds. In IRS Notice IR-2023-02, the IRS stated that is completing the corrections of 2020 accounts for taxpayers who overpaid their taxes on unemployment compensation they received in 2020. The American Rescue Plan of 2021, which became law in March 2021, excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000. To ease the burden on taxpayers, the IRS took steps to review the Forms 1040 and 1040-SR that were filed prior to the law's enactment to identify taxpayers who had already reported unemployment compensation as income and were eligible for the correction. The IRS determined the correct taxable amount of unemployment compensation and tax. IRS to issue 12 million tax refunds.

Some taxpayers received refunds, while others had the overpayment applied to taxes due or other debts. In some cases, the exclusion only resulted in their adjusted gross income. The IRS mailed a letter to these taxpayers to inform them of the corrections. Taxpayers should keep that letter with their tax records. The IRS corrected approximately 14 million returns. This resulted in nearly 12 million refunds totaling $14.8 billion, with an average refund of $1232. If a taxpayer is eligible for the unemployment compensation exclusion and their account was not corrected by the IRS, they may need to file an amended return to claim the exclusion and any applicable non-refundable or refundable credits impacted by the exclusion. Taxpayers should not file an amended return if they previously filed on claiming the exclusion. For more information you can go to the IRS website, IRS.GOV or click on the blue link.

If you have unfiled returns and would like to apply for this exclusion you can always contact a good, highly recommended Tax Resolution Company like Federal Tax Resolution that can provide you with quality Tax Resolution Services.