The Internal Revenue Service (IRS) announced it sent out 12 million refunds totaling nearly $15 billion after making corrections to taxes that were filed in 2020.
The agency said it reviewed forms 1040 and 1040-SR from the 2020 tax year that were filed before March 2021, or when the American Rescue Plan was signed into law. It excluded up to $10,200 in 2020 unemployment compensation, the IRS said, from taxable income calculations.
“The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000,” said an IRS news release issued last week. “To ease the burden on taxpayers, the IRS took steps to review the Forms 1040 and 1040-SR that were filed prior to the law’s enactment to identify taxpayers who had already reported unemployment compensation as income and were eligible for the correction. The IRS determined the correct taxable amount of unemployment compensation and tax.”…