Many people who were out of work in 2020 may want to check their bank accounts now for extra tax refund cash from the federal government — if they did not get that money already.
And if you have children, you'll need to check again this week for a special stimulus of sorts known as the Child Tax Credit.
Taxpayers who filed early this year and have been waiting endlessly for tax refunds related to a change in the way unemployment benefits were taxed on 2020 returns report seeing money in their accounts Wednesday morning.
The Internal Revenue Service announced it would issue another round of tax refunds to nearly 4 million taxpayers who overpaid their taxes on unemployment compensation received last year. The taxpayers overpaid because they filed returns based on old tax rules that treated all jobless benefits as taxable income.
The refunds apply to tax returns filed in February and March before the tax rules changed when the American Rescue Plan was signed into law March 11.
The refund average is $1,265. Some taxpayers will receive more money; others less.
The IRS said these unemployment-related refunds began being issued by direct deposit Wednesday.
And refunds by paper check will begin Friday.
Many waited a long time for refunds
The IRS has been rolling out these refunds in batches. We reported in early June, for example, that the IRS had begun issuing some of these refunds for taxes on 2020 unemployment compensation that were paid before they were excluded from taxable income by recent law changes.