IRS releases guidance on how to collect UI tax break

WHECTV
Created: March 24, 2021 06:48 PM

ROCHESTER, N.Y. (WHEC) — The Internal Revenue Service Wednesday put new guidance out on how to collect the tax break for those who collected Unemployment Insurance benefits last year that was included as part of the new COVID-19 stimulus bill.

The stimulus bill gives most people a break from paying federal taxes on the first $10,200 of benefits they collected in 2020.  

However, many people had already filed their taxes when this bill was passed, so accountants figured they'd have to file an amended return, until this week when the IRS said that won't be necessary.  

The IRS will refigure taxes, using the excluded unemployment compensation amount and adjust accounts accordingly.  

So those who have already filed won't have to file an amended return, and those who haven't filed yet can claim the credit when they file because filing software has been updated.

News10NBC has reached out to the New York State Department of FInace about whether or not it will offer a similar tax break but hasn't received a response.

For now, assume state taxes on all unemployment benefits remain.


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