Tax News Unemployment Stimulus: Am I Eligible for the New Unemployment Income Relief? Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Katharina Reekmans, EA Published Apr 1, 2021 - [Updated Jul 15, 2022] 6 min read The recently passed third stimulus relief package, known as the American Rescue Plan, expands federal unemployment benefits and provides tax free unemployment benefits. If you received unemployment benefits, TurboTax is here to help you understand what all of this means and to help you get every dollar you deserve. Here is what you need to know: The bill makes the first $10,200 of federal unemployment income ($20,400 for married filing jointly) tax-free for households with income less than $150,000. The legislation excludes only 2020 federal unemployment benefits from taxes, not unemployment income received in 2021. If you have not filed your 2020 tax return, yet, TurboTax is up to date with the new law and will guide you on how to claim these additional unemployment benefits on your tax return. If you already filed your 2020 tax return, you do not need to do anything to get these additional unemployment benefits. The IRS announced that they will automatically adjust your return and send any additional refund amount directly to you. However, some people may now be newly eligible for additional deductions and credits not already included on the original tax return. In these cases, you will likely want to amend your return to claim these additional dollars. Additional information on this is below. When will I get my additional unemployment refund from the IRS? According to the IRS, they will send payments in two phases: Phase 1: The IRS will adjust returns for taxpayers eligible for up to $10,200 exclusion. Payments for phase 1 started the week of May 14. Phase 2: The IRS will adjust returns for those married filing jointly taxpayers who are eligible for the up to $20,400 exclusion and others with more complex returns. The IRS issued millions of refunds the first week of June and plans to issue the next set of refunds sometime in mid-June. The IRS will continue to review returns and process corrections during the summer. The IRS is reviewing returns in order from the simplest returns and then to more complex returns. Taxpayers will receive letters from the IRS generally within 30 days of the adjustment informing them of what kind of adjustment was made and the amount. How will I receive my additional unemployment refund amount from the IRS? The IRS will issue refunds resulting from this unemployment income relief by direct deposit for taxpayers who provided bank account information on their 2020 tax return. If valid bank account information is not available, the refund will be mailed as a paper check to the address of record. The IRS will continue to send refunds until all identified tax returns have been reviewed and adjusted. These refunds are subject to normal offset rules such as past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support or student loans. The IRS will send a separate notice to the taxpayer if the refund is offset to pay unpaid debts. How do I know if I am now eligible for additional deductions and credits, and what do I do to get them? It’s a bit tricky. The IRS will adjust your return and the amounts for any deductions and credits you claimed on it. For example, say you claimed the Earned Income Tax Credit (EITC) on your return. And because the new unemployment exclusion changed your income level, you would now be eligible for an increase in EITC amount. The IRS would adjust your return for you and send you the additional refund amount with your additional unemployment benefits. You are all set. The IRS is also making corrections to Earned Income Tax Credit, Premium Tax Credit and the Recovery Rebate Credit since taxpayers may be eligible for these credits with the $10,200 income exclusion. However, say you were not originally eligible for the EITC on your return, but now, because the exclusion changed your income, you are eligible for the EITC. You may need to amend your return to claim that new credit based on your tax situation: The IRS can adjust tax returns for those who are single with no children and the exclusion makes them eligible for EITC. Taxpayers who have qualifying children and become eligible for any new benefits once the exclusion is calculated may have to file an amended tax return to claim new benefits. If you chose not to amend your return, you’d only get the additional unemployment benefits automatically from the IRS and would miss out on additional money you’d be eligible for. The IRS can also adjust tax returns that already include EITC and qualifying children. If you filed with TurboTax, check your inbox. We sent you an email to help you understand how all this affects you and with instructions on what to do. How do I know how much unemployment income I received? When it’s time to file your taxes, you will receive Form 1099-G, which will show the amount of unemployment income you received. Form 1099-G will also show any federal taxes you had taken out of your unemployment pay. You are now entitled to exclude the first $10,200 of federal unemployment income from paying any taxes. Both my spouse and I received unemployment. Are we both eligible? Under the American Rescue Plan, if you are married, each spouse receiving unemployment compensation doesn’t have to pay tax on unemployment compensation of up to $10,200, if your modified adjusted gross income is less than $150,000. If I received a subsidy to pay for 2020 health insurance, will I have to include my unemployment income and pay back the advance premium tax credit? No you will not have to pay it back. Due to the challenges involved in estimating 2020 income when applying for a subsidy, the American Rescue Plan temporarily waives the requirement for taxpayers to pay back excess advance premium tax credits in their 2020 taxes regardless of your income level. In addition, the first $10,200 of your federal unemployment income is tax-free under the American Rescue Plan. If you filed your 2020 taxes before the American Rescue Plan was passed the IRS will be making adjustments to the Premium Tax Credit since you may be eligible for a bigger Premium Tax Credit with the $10,200 exclusion provided by the American Rescue Plan. How much are federal unemployment benefits under the third stimulus package? The American Rescue Plan provides a $300 increase to federal unemployment payments until September 6, 2021. And freelancers and side giggers will continue to be eligible for unemployment benefits with the extension of the Pandemic Unemployment Assistance (PUA). We’ve Got You Covered Don’t worry about knowing these tax laws. No matter what your situation or how you want to file, TurboTax has you covered. With TurboTax you can do your taxes yourself, get help from an expert along the way or hand them off from start to finish to a dedicated tax expert. You can find the latest information on the tax changes and announcements in response to COVID-19, here. Also check back with the Unemployment Center for tax tips, advice, and up to date information related to COVID-19 to help you with your taxes and finances in this time of need. Previous Post Your Top Tax Questions About Coronavirus (COVID-19), Answered Next Post What is My State Tax Deadline? What to Know About… Written by Katharina Reekmans Katharina Reekmans is an Enrolled Agent and a contributor to the TurboTax Blog team. Katharina has years of experience in tax preparation and representation before the IRS. Her passions surround financial literary and tax law interpretation. She has a strong commitment to using all resources and knowledge to best serve the interest of clients. Katharina has worked as a senior tax accountant, operations manager, and controller. Katharina prides herself on unraveling tax laws so that the average person can understand them. More from Katharina Reekmans 104 responses to “Unemployment Stimulus: Am I Eligible for the New Unemployment Income Relief?” Newer Comments » Has anyone filing married with dependants gotten thiers yet Reply Have not as well. Reply Got mine on JUne 2nd, didnt even realize it till today lol, this is the extra money that they gave us back if we filed and claimed taxes on unemployment. Reply Still nothing here. Reply Same! Reply Thank you TURBOTAX KAT for all the updates which has been very helpful. Reply I received the notice about this but I haven’t got anything Reply Got mine the beginning of the week, thxx!! Reply Anyone who filed before the tax break came get there’s yet ?? Reply My boyfriend got his and we had to do an amended return. Reply pretty sure i just got mine tonight! Reply Not yet Anna! Hopefully we get ours soon!! Reply My sister and a co worker recievwd theirs on June 4th Reply My fiancé just got his. Nothing on mine yet. Reply no, still waiting 🙁 Reply Just realized my return is finally pending in my bank account!!! Woohoo! Reply I just received mine!! Was deposited on my turbo card!! YA! Reply Did your amount update on turbo tax first? I still haven’t received anything. Has anyone else? Reply I haven’t received anything yet either, married filing joint so idk if that’s why Reply I received mine Guess your lucky! Did you file married/joint with kids? No. I see some comments here say they see it pending, maybe it’s coming soon. Reply I’ve not received anything either and I’m a single filer Reply YAYYYY!! I just got mine today!! Received mine today. Just got my deposit today!! Reply Has anyone got theirs yet? Reply I haven’t heard of anyone getting theirs yet. Single filers or otherwise, and May is almost over… Reply Same here! Haven’t heard a thing or seen a thing I think I did a few minutes ago. It just says IRS tax refund but I got mine in March Reply My refund is pending in my account for release on Wednesday June 3rd. Reply I believe the IRS stated they will refund any money due via the bank acct. info. on file if it was shared with them. I shared it with Turbotax to get my original refund. Does this mean the IRS has it and I should expect any adjustment to come through electronically? Reply Hi Tim, The IRS will issue refunds resulting by direct deposit for taxpayers who provided bank account information on their 2020 tax return. If valid bank account information is not available, the refund will be mailed as a paper check to the address of record. Hope this helps. Best, Katharina Reekmans Reply Has anyone received their back pay for the unemployment relief tax break ? Reply Hi Vanessa, Refund payments resulting from this unemployment income relief benefit will be made in two phases. The IRS began making payments for phase 1 the week of May 14, 2021. The first phase of adjustments is being made for single taxpayers who had the simplest tax returns, such as those filed by taxpayers who did not claim children or any refundable tax credits. Hope this helps. Best, Katharina Reekmans Reply My taxes go yo child support do is my tax break refund getting sent to child support ad well? Reply Hi John, These resulting refunds are subject to normal offset rules, such as past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support or certain federal nontax debts (i.e., student loans). The IRS will send a separate notice to the taxpayer if the refund is offset to pay unpaid debts. Hope this helps. Best, Katharina Reekmans Reply I should be eligible for the tax refund but it’s late may and still haven’t received Anything thing . Has anyone else got the tax break yet Thank you TurboTax for keeping us informed. Reply Thank you TurboTax for keeping your customers informed. Throughout the stimulus payments to this tax relief. Reply Thank you for the update, Turbo tax. I was expecting the return but instead I owed Federal money. I paid what I owed already. I hope I get some money back. Reply I had to pay as well, which I did $400. But turbo tax told me I needed to Amend. Which I did. Now I’m getting back $1800. Thank you turbo tax Reply Hello I hope that I’ll get some money back or break even. Reply I hope I get something back because when I refilled my state I was told I would get $36 back. Instead I got a bill for $244. Reply Thanks for keeping me informed Reply Wow, I signed back into my TurboTax account to file after waiting a bit for the unemployment software to be updated, and watched my “federal taxes due” drop! Thanks Turbo Tax… been using you for years because you make it so easy and accurate! Reply Do you know when they are going to start sending it out Reply Hi Calvin, The additional unemployment refund amount will be disbursed by the IRS in phases. For taxpayers eligible for up to $10,200 exclusion payments are expected to begin in May. Hope this helps. Sincerely, Katharina Reekmans Reply Any more info? It’s the end of may and nothing?!? Hello, I had unemployment in 2020 with nyc. i filed my ny state return and had to pay taxes. now with the relief, will ny state automatically put back the taxes i paid? Reply Hi Amani, The 2020 unemployment income exclusion under the American Rescue Plan is for your the federal tax return. This exclusion does not necessarily apply to your state tax return. Your state’s Department of Revenue will be able to provide guidance on this. According to the Department of Revenue for New York State, you should report the full amount of unemployment compensation on your New York State personal income tax return. Hope this helps. Best, Katharina Reekmans Reply Thanks Katherine for everything you do. I left an earlier comment. I filed jointly and owed $400. I sent in the payment. But my wife and I received unemployment and qualified for the 10,200 tax break. My question is. Will the IRS send a refund check back to me ? Thank you again Reply Hi Eric, Thank you for reaching out. You do not have to do anything, the IRS will automatically refund money to people who already filed their tax return reporting unemployment compensation and now qualify for the unemployment compensation exclusion. Hope this helps! Sincerely, Katharina Reekmans Reply I have been with turbo tax for years and they haven’t steered me wrong yet.. I like the updates they provide to us thank you soo much for the consistency and accuracy!!! Reply How will they send the payment, will it be on your unemployment card or how you got your tax refund? Reply Hi Doris, If you already filed and figured your taxes based on the full unemployment compensation, the IRS will calculate the correct taxable unemployment compensation and tax. If there is a resulting overpayment of tax it will either be refunded to you or applied to other outstanding taxes owed. Hope this helps. Best, Katharina Reekmans Reply Thanks for keeping me updated with my tax benefits, how do I know if I qualify for the Plus up for having such a huge drop in my income 2020 compared to 2019 Reply Hi Marlene, Glad we can keep you updated! It is possible that you will qualify for a “plus-up” payment as those who’s income dropped in 2020 compared to 2019 may make them qualified for a newer or larger payment once their 2020 tax returns are processed. Hope this helps. Best, Katharina Reekmans Reply Thank u for the updates turbo Reply Thanks turbo tax for everything, that’s why I only use turbo tax for my taxes. Reply Thanks turbo tax for keeping your customers up to date. Reply Thank you Turbo Tax for keeping me informed. This is why I only use you guys to do my taxes Reply Thank you for all the updates !! Reply thank you biden! finally some relief. Reply I have read that the IRS changed their calculation to not include unemployment as part of the MAGI calculation. My agi is above the 150k threshold but if they exclude the unemployment benefits, I would fall under it. Reply Thank you so much for the updates! Hopefully I’m eligible to get some money back, every dollar counts. Reply I do I know I’m eligible Reply Glad this is my Country & thankful to our Goverment & Turbo tax for helping to find funds available. Reply Thank God!!! People don’t realize that making over $75,000 as a single person in Seattle does NOT make you rich or comfortable. It really sucked not getting any of the last two stimulus payments. I hope this will help ease the burdens of this hard time. I’m lucky to be working again and hope everyone else gets there again soon! Reply When I can expect the extra money from my refund if I already did my taxes? Reply Hi John, The IRS will recalculate taxes on unemployment benefits and will begin to send refunds starting in May. Hope this helps. Sincerely, Katharina Reekmans Reply Yes, thank you! So if I filed and received my refund do I just wait for the IRS to reimburse me for the money they took from my unemployment? Reply Thanks for this amazing news! Looking forward to getting the extra money. Every dollar counts! Reply Explains why I still have not received my federal return ty turbo tax Reply Thank you for informing us of this information. Reply Thank you for the update! Reply I sure could use the money I am owed from paying my unemployment so hopefully soon they refunded us Reply I already filed my taxes with TurboTax and have pending payments ( each on April 15) to both the IRS and the State of Michigan. HOw can I cancel those pending payments? Reply If you have already filed and scheduled your payment for April 15, you will need to cancel your payment and reschedule it. For your federal tax return, if you filed with TurboTax, you will need to contact the U.S. Treasury Financial Agent at 888-353-4537 to make that change. Changes to payments need to be made no later than 11:59 p.m. ET two business days prior to the scheduled payment date. For your scheduled payment with the State of Michigan, you will want to contact your state’s Department of Revenue to see what options are available to you. Hope this helps. Sincerely, Katharina Reekmans Reply Thank you Jesus Reply Thank you for the good news! Reply That’s great if they owe us more money I can use it. Reply Thank you for information. Reply I already filed the 2020 tax return. What is about the child tax credit, is there any changes? Will IRS process also automatically ? Reply Hi Danny, The changes to the Child Tax Credit under the American Rescue Plan begin in the tax year 2021 (the taxes for file in 2022). While this credit is for next year’s tax filings, payments will be sent in advance but beginning no earlier than July 2021 so that people don’t have to wait till 2022 when they file their 2021 taxes. Check back on the blog for more updates on the Child Tax Credit! Hope this helps. Best, Katharina Reekmans Reply Newer Comments » Leave a ReplyCancel reply Browse Related Articles TurboTax News TurboTax’s New Super Bowl Ad… Starring Issa Rae! Self-Employed How Can I Avoid Paying Tax on Rental Income? 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Got mine on JUne 2nd, didnt even realize it till today lol, this is the extra money that they gave us back if we filed and claimed taxes on unemployment. Reply
I haven’t heard of anyone getting theirs yet. Single filers or otherwise, and May is almost over… Reply
I believe the IRS stated they will refund any money due via the bank acct. info. on file if it was shared with them. I shared it with Turbotax to get my original refund. Does this mean the IRS has it and I should expect any adjustment to come through electronically? Reply
Hi Tim, The IRS will issue refunds resulting by direct deposit for taxpayers who provided bank account information on their 2020 tax return. If valid bank account information is not available, the refund will be mailed as a paper check to the address of record. Hope this helps. Best, Katharina Reekmans Reply
Hi Vanessa, Refund payments resulting from this unemployment income relief benefit will be made in two phases. The IRS began making payments for phase 1 the week of May 14, 2021. The first phase of adjustments is being made for single taxpayers who had the simplest tax returns, such as those filed by taxpayers who did not claim children or any refundable tax credits. Hope this helps. Best, Katharina Reekmans Reply
Hi John, These resulting refunds are subject to normal offset rules, such as past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support or certain federal nontax debts (i.e., student loans). The IRS will send a separate notice to the taxpayer if the refund is offset to pay unpaid debts. Hope this helps. Best, Katharina Reekmans Reply
I should be eligible for the tax refund but it’s late may and still haven’t received Anything thing . Has anyone else got the tax break yet
Thank you TurboTax for keeping your customers informed. Throughout the stimulus payments to this tax relief. Reply
Thank you for the update, Turbo tax. I was expecting the return but instead I owed Federal money. I paid what I owed already. I hope I get some money back. Reply
I had to pay as well, which I did $400. But turbo tax told me I needed to Amend. Which I did. Now I’m getting back $1800. Thank you turbo tax Reply
I hope I get something back because when I refilled my state I was told I would get $36 back. Instead I got a bill for $244. Reply
Wow, I signed back into my TurboTax account to file after waiting a bit for the unemployment software to be updated, and watched my “federal taxes due” drop! Thanks Turbo Tax… been using you for years because you make it so easy and accurate! Reply
Hi Calvin, The additional unemployment refund amount will be disbursed by the IRS in phases. For taxpayers eligible for up to $10,200 exclusion payments are expected to begin in May. Hope this helps. Sincerely, Katharina Reekmans Reply
Hello, I had unemployment in 2020 with nyc. i filed my ny state return and had to pay taxes. now with the relief, will ny state automatically put back the taxes i paid? Reply
Hi Amani, The 2020 unemployment income exclusion under the American Rescue Plan is for your the federal tax return. This exclusion does not necessarily apply to your state tax return. Your state’s Department of Revenue will be able to provide guidance on this. According to the Department of Revenue for New York State, you should report the full amount of unemployment compensation on your New York State personal income tax return. Hope this helps. Best, Katharina Reekmans Reply
Thanks Katherine for everything you do. I left an earlier comment. I filed jointly and owed $400. I sent in the payment. But my wife and I received unemployment and qualified for the 10,200 tax break. My question is. Will the IRS send a refund check back to me ? Thank you again Reply
Hi Eric, Thank you for reaching out. You do not have to do anything, the IRS will automatically refund money to people who already filed their tax return reporting unemployment compensation and now qualify for the unemployment compensation exclusion. Hope this helps! Sincerely, Katharina Reekmans Reply
I have been with turbo tax for years and they haven’t steered me wrong yet.. I like the updates they provide to us thank you soo much for the consistency and accuracy!!! Reply
How will they send the payment, will it be on your unemployment card or how you got your tax refund? Reply
Hi Doris, If you already filed and figured your taxes based on the full unemployment compensation, the IRS will calculate the correct taxable unemployment compensation and tax. If there is a resulting overpayment of tax it will either be refunded to you or applied to other outstanding taxes owed. Hope this helps. Best, Katharina Reekmans Reply
Thanks for keeping me updated with my tax benefits, how do I know if I qualify for the Plus up for having such a huge drop in my income 2020 compared to 2019 Reply
Hi Marlene, Glad we can keep you updated! It is possible that you will qualify for a “plus-up” payment as those who’s income dropped in 2020 compared to 2019 may make them qualified for a newer or larger payment once their 2020 tax returns are processed. Hope this helps. Best, Katharina Reekmans Reply
I have read that the IRS changed their calculation to not include unemployment as part of the MAGI calculation. My agi is above the 150k threshold but if they exclude the unemployment benefits, I would fall under it. Reply
Thank you so much for the updates! Hopefully I’m eligible to get some money back, every dollar counts. Reply
Glad this is my Country & thankful to our Goverment & Turbo tax for helping to find funds available. Reply
Thank God!!! People don’t realize that making over $75,000 as a single person in Seattle does NOT make you rich or comfortable. It really sucked not getting any of the last two stimulus payments. I hope this will help ease the burdens of this hard time. I’m lucky to be working again and hope everyone else gets there again soon! Reply
Hi John, The IRS will recalculate taxes on unemployment benefits and will begin to send refunds starting in May. Hope this helps. Sincerely, Katharina Reekmans Reply
So if I filed and received my refund do I just wait for the IRS to reimburse me for the money they took from my unemployment? Reply
I sure could use the money I am owed from paying my unemployment so hopefully soon they refunded us Reply
I already filed my taxes with TurboTax and have pending payments ( each on April 15) to both the IRS and the State of Michigan. HOw can I cancel those pending payments? Reply
If you have already filed and scheduled your payment for April 15, you will need to cancel your payment and reschedule it. For your federal tax return, if you filed with TurboTax, you will need to contact the U.S. Treasury Financial Agent at 888-353-4537 to make that change. Changes to payments need to be made no later than 11:59 p.m. ET two business days prior to the scheduled payment date. For your scheduled payment with the State of Michigan, you will want to contact your state’s Department of Revenue to see what options are available to you. Hope this helps. Sincerely, Katharina Reekmans Reply
I already filed the 2020 tax return. What is about the child tax credit, is there any changes? Will IRS process also automatically ? Reply
Hi Danny, The changes to the Child Tax Credit under the American Rescue Plan begin in the tax year 2021 (the taxes for file in 2022). While this credit is for next year’s tax filings, payments will be sent in advance but beginning no earlier than July 2021 so that people don’t have to wait till 2022 when they file their 2021 taxes. Check back on the blog for more updates on the Child Tax Credit! Hope this helps. Best, Katharina Reekmans Reply