Where is my unemployment tax break refund? What to know about the money from the IRS

Refund checks are finally making their way out. 

Angela Lang/CNET

The IRS said back in May it would begin sending tax refunds for qualified 2020 unemployment insurance recipients. After a slow rollout those first few weeks, more refunds started making their way out as of this week. The unemployment refund is due to the $10,200 tax break (or up to $20,400 for married couples filing jointly) included in the American Rescue Plan in March, along with the third stimulus checks and more money for the child tax credit

Unemployment tax refunds will come in waves, with the first to receive them being single filers. Joint filers and others whose tax returns were a bit more complicated will come in the coming weeks and months. The IRS says it’s calculating the refunds and is handling the simpler returns first. 

We’ll continue to follow the details around the unemployment tax exemption. You may also want to know about the states opting out of $300 bonus unemployment payments and other jobless benefits programs as early as next month. If you’re a parent, here are details about the enhanced child tax credit, how much you could get for your family and how to use the upcoming IRS child tax credit portals. This story was recently updated with new information.

What you should know about the unemployment tax refunds

The IRS started sending refunds to taxpayers who received jobless benefits last year. More single filers began seeing deposits in their checking accounts since May 28 with many receiving them on the first week of June. 

Here’s what to expect:

  • The tax break is for those who earned less than $150,000 in adjusted gross income.
  • Refunds started going out the week of May 10, according to the IRS, and will run through the summer as the agency evaluates tax returns. More complicated returns could take longer to process. 
  • The IRS is doing the recalculations in two phases, starting with single filers who are eligible for the up to $10,200 tax break. It will then adjust returns for those married-filing-jointly taxpayers who are eligible for the up to $20,400 tax break.
  • If the IRS determines you are owed a refund on the unemployment tax break, it will automatically send a check.
  • The IRS can seize the refund to cover a past-due debt, such as unpaid federal or state taxes and child support.
  • You don’t need to file an amended return to claim the exemption. (Here’s how to track your tax return status and refund online.) Some who used tax software such as TurboTax said they have seen their refund amount change due to the unemployment refund, although they have yet to see a check. 
  • Refunds will go out as a direct deposit if you provided bank account information on your 2020 tax return. Otherwise, the refund will be mailed as a paper check to the address the IRS has on hand.
  • The IRS will send you a notice explaining the corrections within 30 days of when a correction is made.
  • You won’t be able to track the progress of your refund through the IRS Get My Payment tracker, the Where’s My Refund tool, the Amended Return Status tool or another IRS portal.

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What we don’t know about unemployment tax refunds

The IRS has provided some information on its website about taxes and unemployment compensation. We are still unclear as to how to contact the IRS if there’s a problem with your tax break refund. (Here’s what we know about contacting the IRS for stimulus check problems.) We’ve reached out to the IRS for clarification. 

Where can I check to see how much of an unemployment tax refund I’m getting?

To find out where the IRS processed your refund and for how much, you’ll need your tax transcript. 

Here’s how to find it:

1. Visit IRS.gov and log into your account. If you haven’t opened an account with the IRS, this will take some time as you’ll have to go through multiple steps to confirm your identity. 

2. Once logged into your account, you’ll see the Account Home page. Click the View Tax Records link.

3. On the next page, click the Get Transcript button.

4. Here you’ll see a drop-down menu asking the reason you need a transcript. Select Federal Tax and leave the Customer File Number field empty. Click the Go button.  

5. The following page will show your Return Transcript, Records of Account Transcript, Account Transcript and Wage & Income Transcript for the last four years. You’ll want to select the 2020 Account Transcript

6. This will open a PDF of your transcript, and you want to focus on the Transactions section. What you’re looking for is an entry listed as Refund issued, and it should have a date of either sometime in late May or June. 

If you don’t see that listing, it likely means the IRS hasn’t gotten to your return yet. 

For more, here is information about the child tax credit for up to $3,600 per child and who qualifies.