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IRS Announces It Sent Out 12 Million Tax Refunds After Making Corrections

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IRS Announces It Sent Out 12 Million Tax Refunds After Making Corrections

Authored by Jack Phillips via The Epoch Times (emphasis ours),

The Internal Revenue Service (IRS) announced it sent out 12 million refunds totaling nearly $15 billion after making corrections to taxes that were filed in 2020.

Newly redesigned $100 notes are printed at the Bureau of Engraving and Printing in Washington, D.C., on May 20, 2013. (Mark Wilson/Getty Images)

The agency said it reviewed forms 1040 and 1040-SR from the 2020 tax year that were filed before March 2021, or when the American Rescue Plan was signed into law. It excluded up to $10,200 in 2020 unemployment compensation, the IRS said, from taxable income calculations.

The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000,” said an IRS news release issued last week. “To ease the burden on taxpayers, the IRS took steps to review the Forms 1040 and 1040-SR that were filed prior to the law’s enactment to identify taxpayers who had already reported unemployment compensation as income and were eligible for the correction. The IRS determined the correct taxable amount of unemployment compensation and tax.”

Other corrections that were made by the agency included adjustments to the Earned Income Tax Credit, Recovery Rebate Credit, Additional Child Tax Credit, American Opportunity Tax Credit, Premium Tax Credit, and Advanced Tax Credit, according to the news release.

Taxpayers who are eligible for the unemployment compensation exclusion and whose 2020 taxes were not corrected by the agency should file an amended 2020 tax return to claim refunds or credits, said the IRS. People who believe they qualify for a refund can visit the IRS website for more details on how to file.

Some 14 million tax returns were corrected by the IRS, resulting in about 12 million refunds totaling $14.8 billion. That averaged out to about $1,232 each, the release said, adding that the corrections were made starting in 2021.

Some taxpayers received refunds, while others had the overpayment applied to taxes due or other debts,” the IRS also said. “In some cases, the exclusion only resulted in a reduction in their adjusted gross income.”

2021 and 2022

For 2021’s taxes, many Americans are still awaiting their 2021 refunds and federal stimulus payments, according to the IRS. Federal officials say that there has been hiring challenges, while a Government Accountability Office report found that as of September, the IRS had about 12.4 backlogged returns to process.

“As of November 11, 2022, the IRS had 3.7 million unprocessed individual returns received this year,” the agency said in November. “Of these, 1.7 million returns require error correction or other special handling, and 2 million are paper returns waiting to be reviewed and processed.”

The Internal Revenue Service (IRS) building in Washington on Feb. 19, 2014. (Jim Watson/AFP/Getty Images)

And as for 2022’s taxes, the IRS announced in November that “refunds may be smaller.”

“Refunds may be smaller in 2023. Taxpayers will not receive an additional stimulus payment with a 2023 tax refund because there were no Economic Impact Payments for 2022,” according to an IRS news release. “In addition, taxpayers who don’t itemize and take the standard deduction, won’t be able to deduct their charitable contributions,” it added.

The agency, however, announced in December that it would delay the enforcement of a rule that requires people to report whether they’ve earned $600 or more via third-party payment-processing services and networks like Venmo, Paypal, Etsy, eBay, and more. Under the American Rescue Plan, people who earned that amount or more would get a 1099-K form from those services.

Read more here...

Tyler Durden Thu, 01/12/2023 - 09:20

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