You may get an AUTOMATIC TAX REFUND from the IRS if you received unemployment compensation in 2020. This video covers what you need to know about the refund process.

IMPORTANT UPDATE on May 3, 2021: This video points out that if you weren’t previously eligible for the earned income credit but now are eligible due to the change in law regarding unemployment compensation, you will have to file an amended tax return to get the credit. However, the IRS has recently decided that if you have no children, you will not have to file an amended return to get the credit. See [ Ссылка ]. The IRS will figure the amount of the credit for people with no children and send them the money. However, if you have children, and the change in law regarding unemployment compensation causes you to be newly-eligible for the credit, you’ll have to file an amended return to get the credit.

LINKS TO RESOURCES MENTIONED IN THIS VIDEO:

IRS webpage to help you determine whether your total income for 2020 was too high ($150,000 or more) to be eligible for the $10,200 exclusion from taxable income for unemployment compensation. On the webpage, scroll down to “Unemployment Compensation Exclusion Worksheet.” [ Ссылка ]

Form and instructions to use if you want to determine manually the amount of your refund for 2020 that results from the $10,200 exclusion of unemployment compensation: [ Ссылка ] and [ Ссылка ]

Form and instructions to use if you need to amend your income tax return for 2020 (which you would need to do only under the specific circumstances described in the video): [ Ссылка ] and [ Ссылка ]

LINKS TO OTHER VIDEOS MENTIONED IN THIS VIDEO:

The video uses the earned income tax credit as an example of an increase in a tax credit that may be included in the refund from the IRS. The following videos provide more information regarding the earned income tax credit:

Watch this “Quick Summary” video to help gain an understanding of whether you may qualify for the earned income tax credit and other aspects of the credit, including whether you have any qualifying children: [ Ссылка ]

Watch this video to learn how your earned income tax credit is affected by the exclusion from income of the first $10,200 of unemployment compensation: [ Ссылка ]


DESCRIPTION OF THIS VIDEO:

On March 11, 2021, a new law (the American Rescue Plan Act of 2021) was enacted that retroactively excludes up to $10,200 of unemployment compensation received in 2020 from taxable income. Thus, if you received unemployment compensation in 2020, your income taxes for 2020 will be reduced. The IRS announced on March 31, 2021 that it will automatically process refunds for individuals who filed their 2020 tax returns reporting the full amount of their unemployment compensation as taxable. This video tells you what you need to know about the automatic refunds, including when you can expect a refund and how you can go about determining the amount of your refund.

ABOUT ME

I retired in July 2018 after serving as a tax partner for 26 years in two major accounting firms in Washington, DC (first, at Ernst & Young LLP for 12 years, and later, at Grant Thornton LLP for 14 years). During my career, I was quoted in most of the nation’s major newspapers, including The Wall Street Journal, The New York Times, and USA Today. I also appeared on CNBC. I wrote over 50 articles that were published in various professional journals, and I made over 70 presentations at professional conferences, where I was consistently rated as one of the top presenters by conference attendees. Now that I am retired, I am spending part of my time making videos to help people understand tax issues.

DISCLAIMER

The video is intended to educate you about the earned income credit. It is not intended as tax advice directed specifically to you. You should not treat this video as personal tax advice given by me to you. You cannot use this video as a basis to avoid penalties under the Internal Revenue Code if it is determined that you have taken a position on your tax return that is contrary to the law.

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