You qualify for the unemployment exclusion if you report unemployment benefits as income on your 2020 tax return and your Adjusted Gross Income (AGI), not including unemployment, is less than $150,000.
You didn't say whether you have already filed your 2020 tax return. If you did not file your 2020 tax return yet, you will get the exclusion when you file. It will appear as a negative amount on Schedule 1 line 8, with the abbreviation UCE on the dotted line to the left of the amount. TurboTax will give you the exclusion automatically. You do not have to do anything to get it. Just enter your Form 1099-G, including the full amount of unemployment that you received.
If you already filed your 2020 tax return, and you did not get the unemployment exclusion on the tax return that you filed, the IRS will recalculate your tax return and send you an additional refund. It might take several months to get it. You will get the additional refund if all of the following are true.
- You reported unemployment benefits as income on your 2020 tax return, on Schedule 1 line 7.
- You did not get the unemployment exclusion on the 2020 tax return that you filed. The unemployment exclusion would appear as a negative amount on Schedule 1 line 8, with the abbreviation UCE on the dotted line to the left of the amount.
- Your tax on Form 1040 line 16 is not zero.
- Your Adjusted Gross Income (AGI), not including unemployment, is less than $150,000. In other words, Form 1040 line 11 minus Schedule 1 line 7 is less than $150,000.
If all four of those conditions are true, The IRS will recalculate your tax return and send you the additional refund.
