The headquarters of the Internal Revenue Service (IRS) in Washington, DC
Samuel Corum / Bloomberg via Getty Images
Unemployed Americans must wait to file a corrected tax return to obtain a further tax reduction on unemployment benefits received last year, the IRS said on Friday.
The American Rescue Plan Act of 2021, which President Joe Biden signed on Thursday, waives the federal tax on up to $ 10,200 in unemployment benefits for single adults who earned less than $ 150,000 a year in 2020. (The ceiling is $ 20,400 for two workers in a couple.)
Values above $ 10,200 are still taxable. States may also decide not to offer tax incentives.
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Those who filed an income tax return before Covid’s $ 1.9 trillion relief measure became law should wait to file a corrected statement until the IRS issues additional information, the agency said.
“For those who received unemployment insurance last year and have already completed their 2020 income tax return, the IRS emphasizes that they should not file an amended claim at this time, until the IRS issues additional guidance,” the IRS said on Friday. -market.
The IRS received nearly 56 million returns and processed nearly 49 million on March 5, according to the agency.
About 40 million people received unemployment insurance last year, according to the Century Foundation. The average person received $ 14,000 in assistance.
A retention pattern can put some workers in a difficult situation, especially those who have paid a large tax bill on their unemployment benefits and must now figure out how to recover the funds, said Janet Holtzblatt, senior researcher at Urban-Brookings Tax Policy Center.
New tax instructions
The IRS on Friday also issued tax return instructions for those who had not yet filed a tax return.
“For those who have not yet applied, the IRS will provide a spreadsheet for paper filers and will work with the software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their tax return. 2020, “said the IRS.
The deadline for filing 2020 taxes is one month from now, on April 15th.