The IRS announced it has issued almost 12 million refunds to taxpayers after making adjustments to their tax year 2020 accounts, with each of the refunds averaging to over $1,200.
The IRS reviewed the forms 1040 and 1040-SR from the 2020 tax year that taxpayers filed before March 2021, when the American Rescue Plan Act became law. The law excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations, and the review by the IRS was to check which taxpayers had already reported their unemployment compensation as income, making them eligible for the correction, according to a news release published on Friday.
Most of the adjustments made by the IRS to taxpayers' 2020 taxes included corrections to their Earned Income Tax Credit, Recovery Rebate Credit, Additional Child Tax Credit, American Opportunity Tax Credit, Premium Tax Credit, and Advance Premium Tax Credit. Those affected by the IRS's corrections include individuals and married couples whose modified adjusted gross income was less than $150,000. The IRS has mailed a letter to taxpayers about these corrections, which the IRS advises they keep with their tax records.If a taxpayer did not have his or her account modified by the IRS but was eligible for the unemployment compensation exclusion, he or she can file an amended 2020 tax return to claim the exclusion.
Any taxpayers who wish to view their 2020 tax records can do so online or request for a 2020 tax account transcript to be mailed to them.
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