BUFFALO, N.Y. (WKBW) — The IRS has started sending out checks to people who filed their taxes before March 15. These people, according to professionals at EG Tax paid too much on their 2020 taxes.
“On March 17 they changed the tax laws and made the first $10,200 of unemployment tax free, so what the IRS did is they’re adjusting and people are starting to receive their refunds,” said Christopher Fabian, Vice President of EG Tax.
Fabian says this tax year has been full of errors and problems when it comes to the IRS and your money.
“I’ve been doing taxes for 30 years,” he said. “This is the worst year ever for the IRS.”
Fabian says the people who are receiving checks are getting more money than they should, causing an additional headache. You should contact your tax preparer to be sure.
In an update August on 26, EG Tax said many of the checks issued have been overpaid for married couples only. This is because the IRS calculated it assuming both the husband and wife received NYS Unemployment for tax year 2020, although it was often just paid to one spouse.
EG Tax says if you received a refund that was overpaid, the IRS reports they have no intention of asking for a refund, although things are always subject to change. According to EG Tax, the IRS will only ask for a refund if the taxpayers reach out to them.
You can read the full update from EG Tax below:
We now have received word/guidance from the Internal Revenue Service, IRS, regarding “why” the agency has been paying TOO much money on the refunds to taxpayers for the Unemployment Insurance Benefits (UIB). We are all aware under the American Rescue Plan Act (ARP) of 2021, the UIB exclusion subtracted $10,200 of these UIB benefits or $20,400 if Married (income below $15o,000). Again, The IRS has started to mail out the refunds for the taxpayers who paid TOO much in UIB under ARP; however, many of the checks issued have been overpaid (Often by thousand/s of dollars). We have discovered that the checks that included overpayments were for Married couples only; they were calculated by the IRS under the assumption that both the husband and wife received N.Y. State Unemployment for tax year 2020. However, often the unemployment was just paid to one spouse and “not” both. The IRS outlines that they had no way of determining if one or both spouses received UIB, so they issued the checks calculating that both spouses received UIB for 2020.
Secondly, according to the IRS, they realized that they would be a calculated risk when they set out to amend millions of tax returns with UIB. Therefore, the IRS reports that they have no intention of asking for a refund on these overpayments. They will only, according to the IRS, ask for these overpayments back if the taxpayers reach out to the IRS. Of course, things are always subject to change.