Estimated reading time: 1 minute, 33 seconds

IRS to Redo Taxes on Unemployment

The Internal Revenue Service will automatically recalculate taxes on unemployment benefits in light of the American Rescue Plan. The agency will automatically refund money for those  who filed returns before the law was signed on March 11 and are eligible for such aid.

 

The IRS will determine the correct tax and taxable amount for those  who have already filed with any overpayment refunded or applied to taxes owed. The first refunds are expected in May

The legislation enables taxpayers who earned less than $150,000 in modified adjusted gross income in 2020 to exclude  unemployment compensation of up to $20,000 for those married and filing jointly and $10,200 for all other eligible taxpayers

The first  adjustment will be for those eligible for the exclusion for up to $10,000. It will then recalculate the amounts for married filing jointly individuals and those with more complex returns.

Those who have not filed can find information in two places. The first is the New Exclusion of up to $10,200 of Unemployment Compensation while others can find instruction and an updte worksheet at  IRS.gov/form1040.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
Read 856 times
Rate this item
(0 votes)

TPA

Visit other PMG Sites:

click me
PMG360 is committed to protecting the privacy of the personal data we collect from our subscribers/agents/customers/exhibitors and sponsors. On May 25th, the European's GDPR policy will be enforced. Nothing is changing about your current settings or how your information is processed, however, we have made a few changes. We have updated our Privacy Policy and Cookie Policy to make it easier for you to understand what information we collect, how and why we collect it.