October 12, 2021
Are you still waiting for the IRS to return the taxes you paid on your 2020 unemployment benefits?
If so, I have a quick update.
The IRS just confirmed – yes. They are still issuing those refunds. They will go out as the IRS continues to process 2020 tax returns and recalculate returns that were already processed earlier in the year.
If you’re confused – here’s what I’m talking about.
Because of a law congress passed in early 2021 – the first $10,200 of your 2020 unemployment benefit was tax free. By the time congress passed that bill – lots of you had already paid your taxes so the government is issuing refunds for the *taxes* you paid on that money. *no* you’re not getting a $10,200 refund. It’s also important to note – any amount of unemployment benefit *over* $10,200 – you still have to pay taxes on that.
Here are the three things you need to qualify for one of these refunds.
One – you were unemployed in 2020.
Two – you paid taxes on that unemployment benefit in 2021.
And three – you had a modified adjusted gross income of less than $150,000. If all three of those things apply to you the first $10,200 of your unemployment benefit is tax free.
But understand – if you’re owed a refund and you have an outstanding state or federal tax bill or several other types of debts – this refund can be garnished.
If you want to see all my other videos about these unemployment tax refunds go to the “tax stuff” category on my page.
PLUS
The House of Representatives passed the Senate bill to increase the debt ceiling by $480 billion through December 3. Final vote was 219- 206. Now it will go to the President for signature and a debt default will be officially be avoided.
This leaves Congress with a huge task that must be accomplished in less than two months. Not only must they either raise or suspend the debt ceiling but unless they pass a spending plan for 2022, the government is scheduled to shut down on that day.
Congressional leaders say they will be working hard to get both tasks accomplished so we won’t have to take these issues down to the wire again.
