Can Your Unemployment Tax Refund Be Seized? Yes, for These Reasons
In March, the IRS announced that it would automatically send out refunds to anyone who reported unemployment benefits on their taxes. This week, the IRS is preparing t0 start sending those refunds out. And while 40 million Americans received jobless benefits last year as part of the stimulus relief bill, some factors might affect whether these same people will receive a more meager return, or even get a refund at all.
Find Out: How To Go Back To Work And Still Keep Unemployment Benefits
Learn More: Tax Refunds on 2020 Unemployment Benefits Due to Begin This Month
Those who have past-due debts including federal and state taxes, child support, and student loans unemployment will see the funds from their returns be used to offset these outstanding obligations. This also applies to any unemployment benefits that were paid out by mistake. If any of these conditions apply to you, the IRS can automatically draw on your would-be return to correct as much of that balance as possible.
As far as other debts are concerned, funds may be garnished by third-party creditors like banks or credit card companies once they hit a taxpayer’s account, CNBC reports. This can also include overdraft charges and other unpaid fees or debts.
Check Out: How to Approach Your Job Hunt After a Long Stretch of Unemployment
Read Next: The ‘YOLO Economy’ — How Millennials are Reimagining Life Post-Pandemic
Information on new exclusions from the unemployment income tax return as well as instructions for how to fill out the appropriate forms for your student loan interest deductions, taxable social security benefits and more can be found here.
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This article originally appeared on GOBankingRates.com: Can Your Unemployment Tax Refund Be Seized? Yes, for These Reasons
