IRS Commissioner Charles Rettig testifies at a Senate finance hearing at the U.S Capitol in Washington, D.C., on April 13. File Photo by Tasos Katopodis/UPI | License Photo
May 15 (UPI) -- The Internal Revenue Service will begin issuing refunds this week to taxpayers who overpaid taxes on their 2020 unemployment compensation.
Under the American Rescue Plan passed in March, workers who received $10,200 or less in unemployment benefits last year don't have to pay taxes on that money.
In a Friday news release, the IRS said it has identified more than 10 million taxpayers who filed their tax returns before the law took effect, and is now reviewing their returns to determine the correct taxable amount of unemployment compensation and tax.
For some taxpayers, the review could result in a refund or a reduction in balance due.
The corrections will be made automatically, in a phased approach, with the first phase being made for single taxpayers who had the simplest tax returns -- such as those filed by taxpayers who did not claim children or have refundable tax credits, the IRS said.
More complex returns -- such as those for married couples or people with children -- will take longer to correct, according to the IRS.
Most refunds will be made as direct deposits, but paper checks will be issued if the account information is not available.
January 31, 2020
National Institutes of Health official Dr. Anthony Fauci (C) speaks about the coronavirus during a press briefing at the White House in Washington, D.C. Health and Human Services Secretary Alexander Azar (L) announced that the United States is declaring the virus a public health emergency and issued a federal quarantine order of 14 days for 195 Americans. Photo by Leigh Vogel/UPI | License Photo