$14.8 Billion in Refunds on The Way: IRS to Send Money Back to 12 Million Americans Under American Rescue Plan Act

The Internal Revenue Service (IRS) announced that it will be sending approximately 12 million tax refunds to Americans. These payments, totaling around $14.8 billion, are going to people who are eligible for additional money back under the American Rescue Plan Act. The average amount received by eligible individuals is $1,232, according to a report by Canada Today on January 9, 2023.

The reason for these additional payments is due to a provision in the Act that exempts some unemployment benefits from taxation. Specifically, up to $10,200 in unemployment benefits paid in 2020 would be excluded from each spouse’s taxable income if they filed their taxes jointly as spouses. This exclusion applied to those who made less than $150,000 in 2020, regardless of their tax return status.

Based on a report by CNBC on January 9, 2023, many people had already filed their tax returns before the Act was passed and therefore already declared and taxed that income. The IRS decided to review tax forms filed before the Act to determine who was affected by this change in the law. After completing its review, the IRS corrected 14 million returns, leading to the issuance of $14.8 billion in refunds to 12 million people.

Eligible individuals who did not have their tax returns corrected must file an amended 2020 tax return to receive their refund. They can do this using online filing software and should do it as soon as possible. This round of refunds is separate from the regular tax refund process, and the IRS will not provide information on the status of individual refunds. Individuals who have filed their taxes can check the status of their refund through the “Where’s My Refund?” feature on the IRS website.