Unemployment refund

[Hya1]

How would I know if I’ll be receiving an refund on my unemployment compensation, ive filed in February 

[kdevere]

If you had taxes withheld from your unemployment compensation, or paid taxes when you filed your return you may be eligible for a refund.  The IRS will deposit the refund into your bank account, if you provided that information when you filed your 2020 tax return, or will mail a check.

The IRS has determined the criteria to be eligible.  Per the IRS, "if your modified adjusted gross income (AGI) is less than $150,000, the American Rescue Plan enacted on March 11, 2021, excludes from income up to $10,200 of unemployment compensation paid in 2020, which means you don’t have to pay tax on unemployment compensation of up to $10,200. If you are married, each spouse receiving unemployment compensation doesn’t have to pay tax on unemployment compensation of up to $10,200. Amounts over $10,200 for each individual are still taxable. If your modified AGI is $150,000 or more, you can’t exclude any unemployment compensation. If you file Form 1040-NR, you can’t exclude any unemployment compensation for your spouse."  (https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation)

You do not need to amend your return; the IRS is currently processing these refunds.  

[GeorgeDenseff]

@kdevere 

Is it possible that some low income people have used all of their credits and are not entitled to a unemployment refund because they have not paid any taxes?  I am wondering about low income, with dependents, EIC, child tax credit, etc.  Could people be waiting in vain?

[kdevere]

Hi George!  that's a great question!  So if there was with holding and the taxpayer is very low income, those taxes would likely be refunded, even on the original return, i.e. HOH (Head of Household) standard deduction being 18,650 less actual income including unemployment = 0 then any taxes paid would be refunded.  So if there are taxes withheld and you are very low income, those should be refunded, if you are low income, taxes were NOT withheld, there would be no refund to wait for.

[GeorgeDenseff]

Thanks.  That is what I was trying to reason out.  I know many people did not withhold tax on their unemployment last year, including myself.  I waited to see if the law would change before I filed.  It meant about $1,500 that I did not owe with my return.  Which was a nice break for me.

I keep seeing people on here and on Facebook who are waiting on a refund that is possibly never going to happen.