The $1.9 trillion American Rescue Plan is perhaps best known for putting $1,400 stimulus checks in Americans’ bank accounts. But that’s not all it did. The relief package also boosted unemployment for those still collecting jobless benefits while also making $10,200 in unemployment benefits tax free for 2020. This means that a lot of people who received jobless benefits last year are in line for a refund on their 2020 taxes, which are due May 17.
So far, a good 7.3 million tax returns processed by the IRS are due a refund based on the tax-free unemployment rule. And while the IRS hasn’t said how many taxpayers in total it expects to issue refunds for due to this change, that number could climb substantially by the time this year’s tax season wraps up.