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Now that the American Rescue Plan Act to include a third round of stimulus payments has been signed, we also want to share another important part of the $1.9 trillion rescue package with you –
- the continuation of federally enhanced unemployment at $300 per week until Labor Day
- a new tax waiver for some families that have collected unemployment in 2020
Unemployment Boost – The relief package adds $300 per week in federal payments on top of the amount you receive from the state if you are currently collecting unemployment.
New $10,200 Tax Waiver for individuals and couples who made less than $150,000 in adjusted gross income in 2020 – A new provision waives federal taxes on the first $10,200 of unemployment benefits that you received in 2020. Married couples who file jointly and both collected unemployment insurance benefits in 2020 will have taxes waived on $10,200 per person, or up to $20,400 of UI benefits total according to CNBC.
If you have already filed your 2020 federal taxes – The IRS should be issuing guidance on this soon. If you received $10,200 or more in Unemployment Income in 2020, this tax waiver could mean a higher federal tax refund for you. The article also states that if you have already received a refund, you may need to file an amended return to claim the $10,200 exemption. “Amending your return basically means that you re-file your return, but subtract up to $10,200 of [unemployment insurance] benefits,” according to experts at The Century Foundation. “Depending on your tax rate, that could result in a refund check of more than $1,000.”
We are waiting for the IRS to give further direction on this in the coming days, but wanted to give you a heads up to consider what this could mean for you and your families.
As always, if you have questions, we encourage you to seek a tax preparer’s advice. HTSFF is sharing the latest news with our followers about the $1.9 Covid Relief Bill , however, we are not providing tax advice.
Source: CNBC
Source: MarketWatch
Additional Resource and future updates can be found here: IRS Coronavirus Tax Relief
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