CARTHAGE, NY — If you are one of the roughly 40 million Americans who collected Federal unemployment benefits in 2020, the Covid Relief Bill signed just passed by Congress includes a very important tax waiver that could save people from a surprise tax bill when they file their 2020 tax return.
The new Covid Relief Bill allows for a TAX WAIVER, of up to $10,200 of unemployment income for those who made less than $150,000 in adjusted gross income in 2020. This could significantly reduce the tax liability for many people. Before this legislation everyone who collected unemployment benefits was responsible for claiming those funds as income and pay subsequent taxes on that income.
According to most experts, the provision in the latest stimulus bill will reduce up to $1,020 in tax liabilities, either increasing people’s refunds or lowering the amount that they owe. Of course, those who had more than $10,200 in unemployment income in 2020 will still be taxed on the remainder of the benefits.
Here is the important news related to filing your taxes. If you had unemployment income in 2020, and you haven’t filed your 2020 return, discuss this recent update with your tax return specialist to take advantage of the waiver. If you have already filed you will need to send in an amended return, which can be a bit cumbersome, but well worth your time and investment.
M. R. Gaebel is ready to implement these new provisions with e-filing for new returns, or assistance with amended returns.
For more information contact M. R. Gaebel at 315-493-1862.