The Internal Revenue Service (IRS) gave Texans an extension on filing taxes because of the winter storm. That deadline is now Tuesday.
With many Americans applying for unemployment for the first time in 2020, some people have wondered about the validity of an unemployment tax refund letter from the IRS.
Is the IRS mailing people about refunds on taxed unemployment?
Clay Sanford, spokesman for the IRS
Yes, the IRS is mailing refunds to people who claimed unemployment benefits as income and filed their taxes before the American Rescue plan was passed.
WHAT WE FOUND
When you file for unemployment, the money you receive is normally taxable income.
But this March, Congress passed the American Rescue Plan. This $1.9 trillion stimulus bill made any unemployment compensation from 2020 tax-free.
"It's helping people out," Sanford said. "It's giving them a break to get some money back."
The IRS said in May that there are more than 10 million Americans who filed their taxes before March 11, when the stimulus bill was passed. This could result in a refund, a reduced balance due or no change to tax (no refund due nor amount owed).
"In other words, some people may think that it's a refund of $10,200, but it's not a refund," Sanford said. "It's actually taking that out for figuring tax. In a way, it's maximizing your refund is what it's doing."
Sanford says it's important to note this notice should physically come in the mail and not electronically. While people can sign up to receive emails or news from the IRS, but the government department will not email you unsolicited.
"Any kind of an unsolicited email that's about your tax account is not going to happen," Sanford said.
If you filed electronically with your bank information, the IRS says not to worry about getting something in the mail. They’ll just deposit the money right into your account.