Stimulus check: More than $ 2 billion goes out this week – see if you qualify
The IRS is distributes additional refund checks this week to about 1.5 million taxpayers who received unemployment benefits by 2020, which means some Americans will soon have extra cash in their pockets.
These refunds are for tax paid on unemployment benefits received last year. Typically, unemployment benefits are fully taxable. But the Biden administration’s U.S. bailout plan, adopted in March 2021, exempts up to $ 10,200 in tax benefits for individuals and married couples earning less than $ 150,000 by 2020.
As a result, a lot of people who have collected unemployment benefits in 2020 – even if it was only for a single week – are set on receiving further cash relief.
According to the IRS, the average payback check for this round is $ 1,686. The agency has been issuing unemployment benefit tax refunds to 8.7 million Americans since May and continues to do so while reviewing returns.
In most cases, taxpayers do not have to do anything to receive the unemployment benefit tax exemption, as refunds are paid automatically.
However, the IRS has said that some individuals and families may now be eligible for additional deductions and credits that are not required on their original returns. These include the following groups:
- Taxpayers who have not submitted Form 8812 to claim the additional child tax deduction and who are now eligible for the credit
- Taxpayers who have not submitted a Schedule EIC with the original return to claim earned income tax deduction (with qualified relatives) and who are now eligible for the credit
- Taxpayers who are now entitled to other credits and / or deductions as a result of the adjusted income
Direct payments of the tax refunds began on July 28, and paper checks for refund of unemployment tax are issued on July 30.
Deadline for changing child tax deductions
The first round of direct payments and paper checks provided by the extended child tax deduction went out almost two weeks agoand eligible families have until August 2 to either change their direct deposit information or unsubscribe from prepayments prior to the August payout.
Families who fall into one of the following categories may consider choosing a lump sum on their 2021 tax returns instead:
- Those who expect their 2021 income to be too high to qualify for the child tax deduction
- Those whose children are required on the tax returns of others
- Those whose primary residence was outside the United States for more than half of 2021
To update or change your information and choices, go to Child tax credit update portal at IRS.gov.