A married couple has a combined AGI >150K, but one spouse has an income <100K including his unemployment payments.
In past years, they filed tax returns using Married-Filing Jointly status. This year they plan to choose MFS status, and remove $10,200 from the unemployment income in the unemployed spouse’s return, but are not sure about whether the IRS will object.
What does the TT community think? Your feedback will be appreciated.
FYI: Section 9042 of the American Rescue Plan – 2021 (Suspension of tax on portion of unemployment compensation) only mentions about the 150K threadhold as AGI of the taxpayer, and not the combined AGI of married couples.
SEC. 9042: “(c) Special Rule For 2020.—
“(1) IN GENERAL.—In the case of any taxable year beginning in 2020, if the adjusted gross income of the taxpayer for such taxable year is less than $150,000, the gross income of such taxpayer shall not include so much of the unemployment compensation received by such taxpayer (or, in the case of a joint return, received by each spouse) as does not exceed $10,200.
