Nothing like changing the rules after we start playing the game.
The American Rescue Plan Act of 2021 has changed the 2020 taxable unemployment. Now the only portion that is taxable for unemployment is the amount over $10,200 providing you meet the income limitations.
For some of you this means changing your 2020 return that was already filed. As of right now the IRS is telling taxpayers who have already filed to do nothing. They are reviewing the law and will give guidance as they determine how they are going to handle these returns.
For those who have not filed. It is recommend you wait to file until the IRS has had a chance to put a worksheet out. This worksheet will calculate the taxable portion of your unemployment benefits.
The take away is if you had unemployment benefits paid to you in 2020 be patient as the IRS has to get the new law implemented both for those who have and for those who have not yet filed.
The Wassman CPA Services website and blog is meant to offer general information to our readers. The information provided is not intended to replace or serve as a substitute for any accounting, tax or other professional advice, consultation or service. You should contact Wassman CPA Services for advice concerning specific matters prior to making any decisions.
