The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021. Additional information about a new round of Economic Impact Payments, the expanded Child Tax Credit, including advance payments of the Child Tax Credit, and other tax provisions will be made available as soon as possible on IRS.gov.
The IRS strongly urges taxpayers to not file amended returns related to the new legislative provisions or take other unnecessary steps at this time.
For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return.
For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance.
If you’ve already filed your 2020 return, you should not do anything. The IRS will refigure your taxes and send any refund amount directly to you. Go here for more unemployment updates as they become available.
The IRS website states:
If you haven’t filed your taxes, and you qualify for the new benefit, the IRS will be releasing a worksheet for paper filers. The agency also said it’s working with tax software companies to update their current tax software so that you can determine how to report unemployment income on your 2020 tax return.
If you haven’t filed your 2020 tax returns yet but received unemployment last year, it may be best to wait before submitting your taxes to see how the agency’s forthcoming instructions will affect you.
With roughly two months until the new tax day, you still have time and waiting might be the smartest move at the moment.
Without knowing how IRS is going to determine the handling on a software developer's return, we cannot tell you what to look for. Hopefully it will be soon.
