IRS Says 2.8 Million Will Get Overpaid Unemployment Money Returned

The Internal Revenue Service plans to send back money to 2.8 million Americans who filed taxes early, before legislation that waived tax on unemployment compensation paid in 2020.

The American Rescue Plan signed earlier this year excluded up to $10,200 in unemployment compensation per taxpayer paid in 2020. Filers who paid their taxes early did not deduct those funds and are now due money back. Refunds will be calculated using the maximum allowance. A typical refund amount will be far smaller than $10,200.

As of Monday, the IRS said it had reviewed over 3.1 million returns, with more than 2.8 million receiving refunds. The agency said it will continue the reviews through summer, starting with the simplest returns and then working with the more complex calculations.

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