Friday, March 29, 2024
Homeyour money your futureTax refunds on $10,200 of unemployment benefits start in May. Here’s who’ll...

Tax refunds on $10,200 of unemployment benefits start in May. Here’s who’ll get them first

  • The American Rescue Plan, which President Joe Biden signed in mid-March, waived federal tax on up to $10,200 of unemployment benefits, per person.
  • The IRS will start issuing refunds to eligible taxpayers in May. This applies to workers who'd filed a tax return before the $1.9 trillion Covid relief bill became law.
  • The agency will send funds in two phases. Payments will continue into the summer.

Tetra Images | Getty Images

Tax refunds on 2020 unemployment benefits are slated to start this month.

But some taxpayers — namely, single filers — will get the money sooner than others.

It may be summer before other groups, such as married couples and those with complex tax returns, get their refunds, according to the IRS.

More from Your Money, Your Future:

Here's a look at more on how to manage, grow and protect your money.

Jobless benefits are typically treated as taxable income. The American Rescue Plan waived federal tax on up to $10,200 of unemployment benefits, per person, collected last year.

The Covid pandemic created the worst unemployment crisis since the Great Depression. Around 40 million Americans received unemployment benefits in 2020, according to The Century Foundation. The average person got $14,000.

However, many workers eligible for the tax break had already filed their tax returns by the time President Joe Biden signed the $1.9 trillion Covid relief bill in mid-March — about a month into tax season.

They may have overpaid their taxes as a result.

RELATED ARTICLES
- Advertisment -

Most Popular