The IRS announced Tuesday it is refunding about 4 million people who overpaid their 2020 unemployment insurance (UI) taxes in 2020.
Taxpayers can expect refunds in the coming days: They will be direct deposited to some recipients' bank accounts on Wednesday, July 14, and paper checks will start being mailed Friday, July 16. Taxpayers can expect to receive a refund of $1,265, on average.
The American Rescue Plan (ARP), signed by President Joe Biden in March, excluded up to $10,200 in 2020 unemployment compensation from many recipients' taxable income. Because many people filed their tax returns before it was signed into law, the IRS is now refunding those who overpaid.
This is the third round of UI tax refunds, according to the agency. Payments will continue to be made throughout the summer.
Most taxpayers don't need to do anything in order to receive the payment. For more information on who qualifies, read this article.
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