Question

tax-free chunk of unemployment benefits people received last year.

Forum|Forum|5 years ago
March 11, 2021
1 reply
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So I have been waiting to file my taxes to see how the stimulus bill would pass. As you all know it was signed into law today. My wife had unemployment last year and in turbo tax, she paid taxes on it. Will turbo tax program the unemployment deduction into the system so that I can file now?

The new stimulus package, called the American Rescue Plan Act of 2021, makes tax-free a big chunk of unemployment benefits people received last year. ... For a family with $100,000 in taxable income, this means a savings of $2,244 in taxes.

DoninGA

Employee

You will be able to file an amended tax return for the unemployment exclusion, but not right now.

After the legislation has passed Congress and after the President has signed the legislation and after the IRS has written the rules, regulations and procedures. And after the IRS has changed any forms or schedules to accept the tax code changes. And after the IRS has approved the changes in the TurboTax program that apply to the tax code changes, then it will be available for the users of the tax preparation software.

This can take anywhere from several weeks to several months before it becomes available.

This legislation is only for a federal tax return. The individual states will have to decide if they will change their state tax code if they tax unemployment compensation.