2020 Back Unemployment Benefits received in 2021

Forum|Forum|4 years ago
September 9, 2021
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I received the majority of my 2020 unemployment benefits that were owed to me in a lump sum in January 2021. Is there any way I can use the $10,200 exemption that was meant for 2020 benefits, or am I stuck with no exemption because they were finally paid out to me in January 2021?

Thanks for any help you can offer!

Best answer by Natalie A

Hi Romeo! Unfortunately, you would not be able take advantage of the $10,200 exclusion as the income was received in 2021. In order to be eligible for the exclusion the unemployment compensation must be received in 2020 and your modified adjusted gross income (AGI) must be less than $150,000. The IRS has a Unemployment Compensation Exclusion FAQs page that I'm including for more information. IRS Unemployment Compensation Exclusion FAQs

Natalie AAnswer

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Romeo3Author

Thank you for your response ❤️

Natalie A

My pleasure Romeo, glad to help. Hi Lulu, the IRS advised taxpayers who are eligible for the unemployment exclusion that they would NOT need to amend their 2020 return, that the IRS would recalculate the return and any resulting overpayment would be sent as a refund to the taxpayer. As a side note, there are situations were an amendment would be applicable. If the Unemployment Exclusion of up to $10,200 in unemployment compensation would now make you eligible for a credit or deduction not claimed on your original return, in that case the taxpayer would amend. The IRS has a frequently asked questions page related to this and gives examples of situations where the taxpayer would need to amend. See Question 2 Unemployment Exclusion FAQs, Amended Return

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