Some Americans have been surprised by a deposit from the Internal Revenue Service in their bank accounts.
They payment was not a fourth stimulus check, but rather a refund for taxpayers who overpaid taxes on unemployment compensation in 2020.
Millions of tax returns had to be adjusted after the American Rescue Plan Act, which became law in March, excluded up to $10,200 in 2020 unemployment compensation from taxable income. As a result, those who filed their taxes before the law took effect are owed refunds.
The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000, the IRS said.
In late July, the IRS said it has already issued more than 8.7 million refunds connected to the unemployment compensation adjustments, totaling over $10 billion.
The IRS said it had started with the simplest tax returns before moving on to review more complex returns.
The fourth round of payments in late July sent refunds averaging more than $1,600 to another 1.5 million taxpayers.
An IRS spokesperson confirmed to Newsweek that the recent payments were related to the adjustments for unemployment benefits people reported on their 2020 returns.
"We are continuing to work on these adjustments and where affected taxpayers are due additional refunds, we are issuing them," the spokesperson said.
Some recipients took to social media this week when the refunds unexpectedly dropped into their bank accounts.
"Woohoo! I received my IRS tax refund today of the taxes withheld from the first $10,000 of unemployment!" Hank Hillyard wrote on Facebook.
I woke up with another $1600 added to my account from the IRS.
Not sure if this was more stimulus, a tax refund, or a mistake.
I better put this into crypto before they realize I have it!
â Mike Korbel (@MKorbel_1) August 18, 2021Eric Edwards wrote on Twitter: "Checked my bank around 3am last night looking for my paltry $226 of Fl unemployment per 2 weeks and there was an extra $1k from IRS. WOO HOO. guess it's the refund of last year's benefits that were taxed!!"
"Good morning to only the IRS for giving me that extra refund finally shortly after I make a reckless expensive purchase," Dani Sacco tweeted.
Gail Miller added: "For those of you still waiting on the IRS for your refunds there is hope. After 5 1/2 months I received a surprise in my bank account, my refund!"
For those of you still waiting on the IRS for your refunds there is hope. After 5 1/2 months I received a surprise in my bank account, my refund!
â Gail Miller (@b_ball48) August 18, 2021Good morning to only the IRS for giving me that extra refund finally shortly after I make a reckless expensive purchase ðĪŠ
â Dani Sacco (@DaniSaccoPhoto) August 18, 2021"I woke up with another $1600 added to my account from the IRS," Mike Korbel wrote on Twitter. "Not sure if this was more stimulus, a tax refund, or a mistake. I better put this into crypto before they realize I have it!"
For those confused about the payment, the IRS says taxpayers will generally receive letters within 30 days of the adjustment, informing them of what kind of adjustment was made and the amount.
Update 8/24, 10 a.m. ET: This article has been updated with comment from the IRS.
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