New Exclusion of up to $10,200 of Unemployment Compensation

If your modified adjusted gross income (AGI) is less than $150,000, the American Rescue Plan enacted on March 11, 2021, excludes from income up to $10,200 of unemployment compensation paid in 2020, which means you don’t have to pay tax on unemployment compensation of up to $10,200. If you are married, each spouse receiving unemployment compensation doesn’t have to pay tax on unemployment compensation of up to $10,200. Amounts over $10,200 for each individual are still taxable. If your modified AGI is $150,000 or more, you can’t exclude any unemployment compensation.

Unemployment Compensation

You should receive a Form 1099-G showing in box 1 the total unemployment compensation paid to you in 2020.

Read more: https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemployment-compensation

Need Help?

If you need assistance, please let us know as soon as you can.
For a quick consultation, here is our calendar. Please book a time that works for you best.

https://calendly.com/dhuang-2/new-client-phone-call

Leave a Reply

Your email address will not be published. Required fields are marked *