If you have yet to file your 2020 tax return, you can claim the tax break up to $10,200 from your taxable income. Also, if you file Form 1040-NR, you can’t claim the unemployment tax break for your spouse. If your MAGI exceeds the income threshold, you won’t qualify for the tax exclusion and will need to pay taxes on any unemployment compensation you receive. If you’re married, each qualifying spouse may exclude up to $10,200. You may qualify for the tax break up to $10,200 of unemployment compensation if your modified adjusted gross income (MAGI) is less than $150,0. On Intuit's Website Who Qualifies for the $10,200 Unemployment Tax Break? The IRS plans to continue to send more refunds to qualifying taxpayers through the end of 2021.
The IRS will continue to process these tax returns before the end of the year. Although the IRS started processing the unemployment tax refunds in May, it started with the simplest tax returns and is now processing the remaining tax returns. To date, the IRS has identified more than 16 million taxpayers who are eligible and has issued more than 11.7 million unemployment tax refunds, totaling $14.4 billion. ARP provided a tax break of up to $10,200 to those who received unemployment compensation in 2020. These taxpayers are getting a refund because they had already reported their unemployment compensation on their 2020 tax returns before the American Rescue Plan (ARP) was signed into law. You’ll receive your refund by direct deposit if the IRS has your banking information on file, and a paper check if not. If you claim unemployment and qualify for the adjustment, you don’t need to take any action. 1, the IRS announced it had sent about 430,000 tax refunds to taxpayers who overpaid taxes on their unemployment in 2020.
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