The IRS has completed its final corrections of tax year 2020 accounts for taxpayers who overpaid their taxes on unemployment compensation they received in 2020. The American Rescue Plan Act, enacted in 2021, excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000. The IRS corrected approximately 14 million returns, resulting in nearly 12 million refunds totaling $14.8 billion, with an average refund of $1,232. Many of the adjustments included corrections to the Earned Income Tax Credit, the Recovery Rebate Credit and the Premium Tax Credit.
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