The Internal Revenue Service (IRS) headquarters in Washington, DC
Samuel Corum / Bloomberg via Getty Images
Unemployed Americans must hold off filing an amended tax return to get a new tax break on unemployment benefits received last year, the IRS said Friday.
The American Rescue Plan Act of 2021, which President Joe Biden signed on Thursday, scraps federal taxes on up to $ 10,200 in unemployment benefits for single adults who earned less than $ 150,000 per year in 2020 (the ceiling is $ 20,400 for two employees in a married couple ).)
Amounts in excess of $ 10,200 are still taxable. States can also decide not to offer the tax benefit.
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Those who filed a tax return before the Covid $ 1.9 trillion exemption measure became law should wait to file an amended tax return until the IRS provides additional information, the agency said.
“For those who received unemployment benefits last year and have already filed their 2020 tax returns, the IRS insists that they should not file an amended return at this point until the IRS has issued additional guidelines,” the IRS said Friday.
According to the agency, the IRS received nearly 56 million returns and processed nearly 49 million on March 5.
According to the Century Foundation, about 40 million people received unemployment benefits last year. The average person received $ 14,000 in aid.
A detention pattern can put some workers in a difficult situation, especially those who paid a high tax bill on their unemployment benefits and now need to figure out how to recoup the money, said Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center. .
New tax instructions
The IRS also issued tax filing instructions on Friday for those who had not yet filed a tax return.
“For those who have not yet filed, the IRS will provide a worksheet for paper filers and work with the software industry to update current tax software so taxpayers can determine how to declare their unemployment income on their 2020 tax returns” , the IRS said. .
The 2020 tax filing deadline is one month away, April 15.