IRS Revises 2020 Unemployment Compensation Exclusion FAQs
The IRS recently revised its frequently asked questions (FAQs) on 2020 unemployment compensation exclusion.
The revisions and additions are as follows:
- Question 6, Topic A: Eligibility (NEW)
- Questions 1, 2, 4, Topic D: Amended Return (Form 1040-X)
- Question 2, Topic E: Impact to Income, Credits, and Deductions
- Question 1, 8, 9, Topic G: Receiving a Refund, Letter, or Notice
- Question 1, Topic I: Post Unemployment Compensation Exclusion Adjustment
- Question 1, Topic J: Economic Impact Payment
The American Rescue Plan Act of 2021 provides relief to individuals who received unemployment compensation in 2020. It excludes up to $10,200 of their unemployment compensation from their gross income if their modified adjusted gross income (AGI) is less than $150,000. In the case of married individuals filing a joint tax return, this exclusion of up to $10,200 applies to each spouse.