added a for those who received unemployment benefits in 2020 to go along with , a and a . There was some confusion over how the tax break might work, but the IRS says it will handle the exemption and send out refunds if needed.
The agency made an update Wednesday regarding the unemployment benefits tax exemption in Biden’s Rescue Plan, saying it will recalculate taxes for people who received unemployment compensation in 2020 and already . If the IRS determines the taxpayer is owed a refund, it will send out those checks starting in May and into the summer months. This will be done automatically, meaning there is no need for individuals to file an amended return to claim the exemption.
Due to thepandemic, 23 million Americans filed for unemployment last year, according to the Bureau of Labor Statistics. Under the , or PUA, created under the CARES Act last March, this included those who were laid off from their job as well as gig workers, contractors and self-employed people who don’t normally qualify for unemployment insurance.