Trying to understand my $1,189.58 IRS refund from August 2021 - possible unemployment tax refund on my transcript?

Yes, you're getting that money! I had almost the exact same thing happen. The IRS adjusted unemployment taxes automatically - you didn't have to file anything. Check if they mailed you a check instead of direct deposit. Mine came as a paper check even though my normal refund was direct deposit.

Been dealing with endless phone issues with NY unemployment, then found a service called Claimyr that got me through to a live agent. Helped me solve a similar tax issue when I needed answers about my unemployment tax adjustments. Worth every penny to finally get my benefits squared away. You can check it out here: claimyr.com or see how it works: https://youtu.be/Rdqa1gKtxuE - it was the only way I could actually talk to someone about what happened with my claim.

This is the unemployment tax refund thingy from the American Rescue Plan. They made like the first $10,200 of unemployment not taxable for 2021 taxes, so the IRS has been slowly processing automatic refunds. U definitely getting that money 💰

I'm a tax preparer and I can confirm what others are saying. The "Reduced or removed prior tax assessed" line means they adjusted your tax liability downward due to the unemployment exclusion. The refund amount includes the adjustment plus interest they owe you for the delay. This is legitimate and you should receive payment soon if you haven't already.

Does anyone know how they determine if they direct deposit or mail a check? I got a similar adjustment but I'm moving soon and worried about missing it.

Looking at your transcript - yes that money is yours! The IRS is PAINFULLY slow processing these unemployment tax adjustments. When the law changed making some unemployment benefits non-taxable, they had to go back and recalculate millions of returns. Here's what happened step by step: 1. You paid tax on all your unemployment income when you filed 2. The law changed making a portion tax-free 3. IRS recalculated your return ($1,425 tax reduction) 4. They added interest since they took so long ($13.65) 5. Total refund coming: $1,438.65 You don't need to do anything but wait for the money. If it's been more than 3 weeks since the date on your transcript, you might want to call them. Getting through to the IRS is nearly impossible though - I spent 6+ hours trying before using claimyr.com to reach someone at unemployment for a similar issue. Good luck!

I got something similar but my refund was much smaller - only like $320. I think it depends on your tax bracket and how much unemployment you collected? Anyone know the exact formula they used?

omg i forgot about this! just checked my transcript and i have a similar refund from september that i never received! calling the IRS tomorow

NY unemployment is seriously the most dysfunctional system I've ever dealt with. Took me 5 months to get my benefits and then MORE problems with taxes. So tired of this mess.

I wonder if this is something different from the regular unemployment exclusion? I already got that refund last year, so if you're just now seeing this, it might be something else...

Hey Jackie! I went through the exact same thing last year. That $1,189.58 is definitely yours - it's the unemployment tax adjustment refund from the American Rescue Plan Act. The IRS automatically recalculated your 2020 taxes to exclude up to $10,200 of unemployment income from being taxable. Here's what those confusing lines mean: - "Reduced or removed prior tax assessed" (-$1,178.00): This is the tax you originally paid on unemployment that you no longer owe - Interest credited (-$11.58): They're paying you interest for taking so long to process this - Total refund: $1,189.58 Most people are getting these as paper checks even if they normally get direct deposit. Mine took about 3 weeks to arrive after the transcript date. Definitely keep checking your mailbox! The notice they issued on the same day is just explaining the adjustment - totally normal. That January tax relief credit is likely related to stimulus/recovery rebate credits, separate from this unemployment thing. You're getting real money, just be patient! 🙂