It's November and IRS is issuing more refunds relating to jobless benefits

We're just a few weeks away from Thanksgiving Day but the IRS continues to roll out some 2020 tax refunds.

So check your bank accounts now if you lost work during the pandemic and filed a tax return early last year.

On Monday, the Internal Revenue Service said it recently sent roughly 430,000 refunds to taxpayers who paid taxes on unemployment compensation that ended up being excluded from income for tax year 2020 after a key but limited change in the federal income tax rules.

The refunds will put more than $510 million into wallets now — averaging $1,189 each.

This is the latest round of refunds being issued to many who filed their taxes before an abrupt change in the tax rules. That change only applied to jobless benefits received in 2020 — not 2021.

According to the IRS, plans are in the works to issue another batch of these types of refunds before the end of this year. The IRS said this review process is nearly complete.

Some receiving these refunds might have filed tax returns in February and early March before Congress changed the rules.

The American Rescue Plan Act, signed by President Joe Biden in March, excluded the first $10,200 in unemployment compensation from taxable income in 2020. The exclusion was limited in scope and only applied to individuals and married couples whose modified adjusted gross income was less than $150,000.

The problem the IRS is dealing with now is that many tax returns were already filed early in 2021 — and before this new tax break was put into place. Instead of amending returns, the IRS asked taxpayers to wait and said it would handle the review and refund process.

The IRS has been issuing these unemployment related refunds for several months.

So far, the IRS said Monday, it has issued more than 11.7 million of these type of refunds, which total $14.4 billion.

During this latest round, the IRS dealt with more than 519,000 returns but all taxpayers are not due a refund.

So far, the IRS said, it has identified more than 16 million taxpayers who may be eligible for the adjustment. Some will receive refunds, while others will have the money applied to taxes due or other debts.

If you're in this bunch of taxpayers, the IRS is going to send you a letter within 30 days of this adjustment to explain what just took place.

Another key tidbit: The IRS said Monday that it will be sending notices in November and December to those who did not claim the Earned Income Tax Credit or the Additional Child Tax Credit but may now be eligible for the credits.

If you get that notice, the IRS said you'd need to respond to it.

For those who claimed the credits on their 2020 federal income tax returns, the IRS is making corrections for Earned Income Tax Credit, Additional Child Tax Credit, American Opportunity Credit, Premium Tax Credit and Recovery Rebate Credit since the amounts of the credit could be affected by the change in taxable income relating to jobless benefits.

"Most taxpayers need not take any action and there is no need to call the IRS," the IRS said Monday.

But others might need to file amended returns and should take time to review their situations. Some taxpayers will become eligible for different credits and or deductions that they did not claim earlier once that exclusion is calculated and their taxable income is lower.

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