How to claim the $10,200 deduction for unemployment benefits on your 2020 tax forms
The Denver Post
DENVER — If you lost a job in 2020 and received unemployment benefits to make ends meet, Congress this month approved a tax break for you. The catch, though, is the break came in the middle of tax season — after forms had been printed and after many already filed their returns.
Q. What exactly is the tax break for those who received unemployment compensation in 2020?
The $1.9 trillion American Rescue Plan allows those who received unemployment benefits to deduct $10,200 in payments from their 2020 income.
The benefit only applies to those whose modified adjusted gross income is less than $150,000, according to the IRS’s website.
If your modified AGI is $150,000 or more, you can’t exclude any unemployment compensation. If you are married and both spouses received unemployment, then both are exempt from paying taxes on the first $10,200 they each received. So combined, that totals $20,400.
Amounts over $10,200 for each individual are still taxable.
Read more at DenverPost.com.