Thank you for reaching out to us today.
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.
I understand your question is related to unemployment compensation for 2021. At this time, there is no indication there will be an exemption from federal taxes for unemployment benefits received in 2021. Current law requires that the income be reported as federal taxable income. You should receive a 1099-G reporting your 2021 unemployment compensation for the year. This will be reported on your 2021 Individual Tax Return. States vary whether the unemployment is taxable on a state level. You will need to refer to your specific state’s tax laws.
The IRS newsroom is a great place to stay current with the latest changes as they are announced. You may consider routinely checking the website to see if there are any announcements that will affect your specific tax situation in the future.
https://www.irs.gov/newsroom/whats-hot
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