IRS to recalculate taxes on unemployment benefits; refunds to start in May

IR-2021-71, March 31, 2021 WASHINGTON — To help taxpayers, the Internal Revenue Service announced today that it will take steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan. The legislation, signed on March 11, allows […]

New Exclusion of up to $10,200 of Unemployment Compensation

If your modified adjusted gross income (AGI) is less than $150,000, the American Rescue Plan enacted on March 11, 2021, excludes from income up to $10,200 of unemployment compensation paid in 2020, which means you don’t have to pay tax on unemployment compensation of up to $10,200. If you are married, each spouse receiving unemployment […]

H.R. 1319-119 Suspends Tax on a Portion of Unemployment Benefits Received in 2020.

(a) IN GENERAL.—Section 85 of the Internal Revenue Codeof 1986 is amended by adding at the end the following new subsection:‘‘(c) SPECIAL RULE FOR 2020.—‘‘(1) IN GENERAL.—In the case of any taxable year beginningin 2020, if the adjusted gross income of the taxpayer for suchtaxable year is less than $150,000, the gross income of suchtaxpayer […]