IRS unemployment refund: Still no timeline for September direct deposit as summer ends

With less than a week to go before the official end of summer, many patient Americans are still wondering if they’ll ever receive one of those coveted unemployment-related tax refunds that the Internal Revenue Service (IRS) first announced six months ago.

The refunds are the result of changes to the tax law authorized by the American Rescue Plan, which excluded up to $10,200 in taxable income from 2020 unemployment compensation. The changes meant that millions of taxpayers overpaid taxes on that compensation and were due refunds, which the IRS said it would send out after corrections were made to people’s tax returns.

But that process was only supposed to continue through the “end of summer,” and the IRS has not posted an update about the unemployment-related refunds since the end of July. At that time, the IRS said it had sent out about 8.7 million payments, with the average check size being $1,686. However, it did not say how many more checks it expected to distribute.

Reached for comment, an IRS spokesperson had no new information about when the next round of checks would go out and said an updated news release on the topic was not currently in the works. In other words, it doesn’t look like we’ll get an answer anytime soon.

In August, a source familiar with the payment rollout told us that more than half of the checks had already been distributed and that the agency was still targeting the end of summer internally to complete the process. Summer officially ends on September 22.

Based on recent chatter in Facebook groups and on other online forums dedicated to tax returns, where users often announce when they’ve received a payment from the IRS, distribution of the unemployment-related checks appears to have died down since the last big batch went out in August. Some users in those forums have expressed frustration that the IRS has not communicated a more specific timeline.

The Taxpayer Advocate Service, an independent office within the IRS, has recommended additional funding from Congress to deal with persistent issues that lead to poor communication, including severe understaffing and outdated technology.