The American Rescue Plan Act of 2021, which became law in March, excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000.
For most taxpayers, the IRS will adjust their tax return and send a refund for the unemployment compensation adjustment. In certain cases, an amended return is needed to get the correct adjustment. See the IRS article below.
**Mark the post that answers your question by clicking on "Mark as Best Answer"