Do you receive unemployment? If so, there is some important information about unemployment income and taxes that you need to know:
Unemployment & Taxes
First, according to the IRS, “all unemployment compensation is taxable in the tax year it is received.” When you receive your 1099-G, you will be able to see the total amount of unemployment you received in Box 1. So, if you have questions about filing your taxes, the IRS offers information on How to File.
2020’s Special Rule
The American Rescue Plan Act of 2021 gave individual taxpayers the ability to exclude up to $10,200 in unemployment benefits only for the 2020 tax year. Married taxpayers that use a 1040 or 1040=SR, were provided an exclusion up to $10,200 per spouse.
How Do I Qualify for 2020’s Special Rule?
- Your adjusted gross income (AGI) for 2020 needs to be less than $150,000.
- This amount does not double to $300,000 if you are married and file a joint return.
- Any unemployment compensation in excess of $10,200 is taxable income that must be included on your 2020 tax return.
Need More Tax Information?
Whether you are looking for more tax information or the best options for eliminating your debt, we recommend contacting our office today to set up a free consultation.
At the Law Office of Daniela Romero, we believe in relationships that are based on trust. Before we work together, we would like you to get to know us. We want you to be sure that we are the perfect fit for you. This will allow you to be completely comfortable sharing intimate and difficult details of your case, so we can offer you representation to the fullest extent of the law. Call us today to set up a free consultation.