The IRS will process the recalculations in phases, starting with single tax filers eligible for the up to $10,200 benefit, later focusing on joint filers and “others with more complex returns.” “Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed.” “For those taxpayers who already have filed and figured their tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation and tax,” the statement read in part. The first round of refunds are anticipated to be sent out in May. On March 17, the IRS announced it was pushing the tax filing deadline from April 15 to May 17, hoping in part to give Americans who are owed a refund more time to figure out what the American Rescue Plan’s provisions meant for them.īut an undetermined amount of people had already submitted their tax returns for the prior year, and were not able to take into account the plan’s exemptible income clause.Īccording to a release from the IRS on Wednesday, the agency will begin processing returns and refunds for those impacted over the course of the spring and summer. That number increases to $20,400 for Americans filing taxes as a married couple. Under the legislation, which President Joe Biden signed into law on March 11, Americans who made less than $150,000 and received unemployment benefits in 2020 are exempt from paying federal income tax on up to $10,200 in benefits. The IRS will process the recalculations in phases, starting with single tax filers eligible for the up to $10,200 benefit, later focusing on joint filers and “others with more complex returns".
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