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Level 3
May 28, 2021
Solved

tax treatment of unemployment benefits received in 2021 (not 2020)

  • May 28, 2021
  • 2 replies
  • 14 views

The feds allowed a $10,xxx.xx deduction for pandemic unemployment insurance payments made. in calendar 2020  (example--received $15K in benefits but deduct $10K --pay taxes on balance of $5K).

Will the new 2021 legislation (by Biden) which authorized the $10K deduction on 2020 received "benefits" extend that deduction for benefits paid/recieved in 2021?

    Best answer by xmasbaby0

    Extending that exclusion of federal tax for unemployment for 2021 would take another act of Congress.

    2 replies

    DoninGA
    Level 15
    Level 15
    May 28, 2021

    No.  That exclusion was included in the American Rescue Plan and is only for tax year 2020.

    xmasbaby0Level 15Answer
    Level 15
    May 28, 2021

    Extending that exclusion of federal tax for unemployment for 2021 would take another act of Congress.

    **Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
    Carl
    Level 11
    Level 11
    May 28, 2021

    Will the new 2021 legislation (by Biden) which authorized the $10K deduction on 2020 received "benefits" extend that deduction for benefits paid/recieved in 2021?

    As of the date/time of my response, the answer to your question is no. It would take an act of congress to change that.