IRS Corrects 14 million 2020 Returns

The IRS announced last week that it finished processing corrections on 14 million 2020 tax returns for taxpayers who overpaid their taxes on unemployment compensation they received that year. The American Rescue Plan Act which became law in March of 2021 excluded up to $10,200 in 2020 unemployment compensation from taxable income for individuals and married couples whose gross income was less than $150,000. Many people had already filed their tax returns when the law became effective, so IRS automatically corrected those returns and is issuing approximately 12 million refunds. If you receive an unexpected check from the IRS, as always, check the IRS explanation, which will probably come separately from your check, against your records, and contact a qualified accountant if you don't understand the changes.