The IRS is sending out 4 million refunds this week to taxpayers who overpaid on their 2020 unemployment benefits

(KYMA, KECY/NBC News) - Roughly 4 million refunds will be sent this week to people who overpaid taxes on their 2020 unemployment benefits, the IRS announced Tuesday.

Due to the $1.9 trillion American Rescue Plan Act, which became law in March, up to $10,200 in 2020 unemployment compensation was excluded from taxable income for individuals and married couples with modified adjusted gross income under $150,000 last year.

However, many taxpayers had already filed their tax returns before the legislation was approved by Congress and signed into law by President Joe Biden.

For taxpayers who overpaid due to the exclusion, the IRS will either refund the overpayment — as it’s doing this week — or apply it to other outstanding taxes or other federal or state debts owed.