Hello @bobmthompson01,
I hope you are doing well today. You have received unemployment benefits for tax year 2021. You want to know if the 2021 unemployment benefits will be taxable when you file your 2021 return.
To answer your question, Yes, currently all unemployment income will be taxable when you file your 2021 federal tax return. The American Rescue Plan that was enacted on March 11, 2021, excluded from taxable income $10,200 in unemployment benefits for tax year 2020. However, the American Rescue Plan did not create a similar unemployment income exclusion for 2021.
Link: https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation
As of today's date (September 9, 2021), United States Congress has not enacted a plan similar to the American Rescue Plan to exclude unemployment income from being taxable on your 2021 tax return. Therefore, all unemployment income will be taxable on the Federal level. Please find below a link to an article describing 2021 unemployment benefits being taxable.
Link: https://www.cnbc.com/2021/07/12/dont-count-on-another-tax-break-on-unemployment-benefits.html
I hope this answers your question. Thanks for using Turbotax Live!
Taylor, Tax Attorney, 11 Years
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