The American Rescue Plan Act of 2021 helped those receiving unemployment benefits in 2020.
In Fact Sheet 2022-39, the IRS updated frequently asked questions about the 2020 unemployment compensation exclusion.
The updates are as follows:
- Topic D: Amended Return (Form 1040-X): Questions 1 and 2 were combined, question 3 was removed, and question 4 was renumbered.
- Question 2 for Topic E: Impact on Income, Credits, and Deductions.
- Questions 2, 3, 5, 8, and 9 are from Topic G: Receiving a Refund, Letter, or Notice.
- Topic H: Calculating Unemployment Compensation: Question 2
Individuals who received unemployment benefits in 2020 were given relief under the American Rescue Plan Act of 2021, which was signed into law on March 11, 2021. It contains a provision that makes the first $10,200 unemployment pay nontaxable for each taxpayer earning less than $150,000 in 2020. This exclusion of up to $10,200 applies to each spouse when married individuals file a joint tax return.
There is additional information on reliance.
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