IRS starts sending refunds to those who overpaid taxes on unemployment benefits

Americans who overpaid taxes on unemployment benefits this year will start to receive refunds this week, the Internal Revenue Service announced Friday.

Under the American Rescue Plan, workers who received $10,200 or less in unemployment benefits last year don't have to pay taxes on that money, as they normally would. However, Congress passed the law change in March, after millions of people had already filed their tax returns. As many as 10 million people potentially overpaid their taxes and could be in line for refunds, the IRS said Friday. The agency has begun correcting those tax returns and issuing refunds. It's doing the work in phases, starting with single taxpayers with simple returns — such as those who didn't claim children or refundable tax credits.