Automatic Unemployment Refunds Will Be Processed

        One feature of the recently passed 2021 American Rescue Plan (ARP) is the ability to have up to $10,200 of Unemployment Income from 2020 be exempted from tax. This is certainly something that many Taxpayer’s would want to make use of. However, this was enacted after Tax Season had begun. Tax returns were already being filed and tax refunds issued without this credit being applied. The Internal Revenue Service (IRS) was very clear in saying that they did not want amended returns to be filed.

          It has now become clear why they did not want this to happen. The IRS will automatically issue refunds for the tax paid on the Unemployment Income, if you qualify. They are also updating their software and sending out new worksheets for those who have not filed. This is might be one of the reasons why the tax filing deadline for individuals has moved to May 17. As we have stated in a previous post, there are many productive things you can do with this extra time before filing your Tax Return.

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