IRS to recalculate taxes on unemployment benefits
April 1, 2021
The IRS has announced that it will automatically refund money to taxpayers who reported unemployment compensation in their tax return before the recent changes made by the American Rescue Plan signed on March 11, 2021.
The American Rescue Plan allows taxpayers earning less than $150,000 in modified adjusted gross income to exclude unemployment compensation up to $20,400 if married filing jointly and $10,200 for other taxpayers. The legislation only applies to 2020 unemployment benefits.