WendyS
Employee Tax Expert

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The American Rescue Plan Act passed into law that the first $10,200 of unemployment compensation was exempt from federal taxes for individuals with household incomes of less than $150,000 for the tax year 2020.  The American Rescue Plan Act unemployment benefit exclusion was only for the 2020 tax year.

The American Rescue Plan Act was passed on March 11, 2021. You stated you filed both your federal and state returns in February.  Your federal return should be automatically adjusted and any additional refund due to unemployment compensation exclusion should be adjusted by the IRS and sent to you.

 

I understand you are asking specifically about South Carolina taxable income.  On May 18, 2021, the South Carolina Governor signed into law a bill that conformed with the federal exclusion of unemployment compensation. Since you filed both tax returns in February that included all of your unemployment compensation as taxable income, you will need to file a South Carolina amended tax return.

 

For your convenience, I am including a link to the South Carolina Department of Revenue guidance on how to amend your tax return to exclude unemployment benefits news release.

 

https://dor.sc.gov/resources-site/media-site/Pages/SCDOR-issues-guidance-on-how-to-amend-your-tax-re... 

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