![]() ![]() What should you do? We recommend everyone look at your taxes again post-ARPA. In that case, you might get more money back in your pocket by filing an amended return. Your adjusted unemployment benefits may now qualify you for a credit or deduction that you wouldn’t have been eligible for before, but the IRS isn’t able to perform those calculations. There’s one big detail that you should definitely pay attention to here: The IRS can adjust the amount of a previously-claimed tax break, but not the new eligibility of one. What would I need to file an amended return for? That amount will either be sent as a refund or applied to any outstanding taxes owed. The best part if you are in this camp? You won’t have to lift a finger-the IRS plans to determine the amount you qualify for and send it accordingly throughout spring and summer. Removing up to $10,200 of unemployment income from your tax return will lower your AGI, and AGI is used as a qualifier for a number of tax breaks.įor example, taxpayers who claimed the Earned Income Tax Credit (EIC) may now be eligible for an increase in the EITC amount, which may result in a larger refund or a smaller bill for taxes owed. ![]() The IRS intends to return any unemployment taxes you paid, plus adjust any credits or deductions you initially claimed on your taxes based your new adjusted gross income (AGI) figure. What will the IRS automatically calculate and apply? what they don’t, and whether you should amend your tax return or let the IRS automatically distribute your refund. Well, this is good news for some and not-as-good news for others-either way, it’s confusing. They also intend to adjust credits or deductions to the extent possible, so you may get even more of a boost. They include the Pandemic Unemployment Assistance program, which provides benefits to some self-employed workers who have lost income as a result of the pandemic, and the Pandemic Emergency Unemployment Compensation program, which provides additional benefits to those who’ve been affected by the pandemic and have exhausted regular state benefits.The IRS officially announced that they plan to automatically issue refunds to anyone who filed their taxes before the American Rescue Plan (ARPA) made $10,200 of unemployment income tax-free. The bill also extends two key pandemic unemployment programs into September. The stimulus relief plan that became law earlier this month extends federal supplemental unemployment benefits at their current level of $300 through September 6. The new IRS guidance also includes details for those eligible taxpayers who have not yet filed their taxes.Ībout 10 million Americans were still unemployed as of last month. The IRS said it is in the process of determining that. It’s unclear how many of them filed returns before this change took effect. workers nationwide filed for unemployment last year-including some self-employed workers who qualified for unemployed benefits as well. How many people may qualify for these tax refunds?Īccording to the Bureau of Labor Statistics, over 23 million U.S. You’d have to file an amended return if you did not originally claim the earned income tax credit or other credits, but are now are eligible because the new exclusion changed your income level. For example, if you claimed the Earned Income Tax Credit and the new recalculation changes your reported income level, you may now be eligible for an increase in the tax credit amount, which may result in an even larger refund. ![]()
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