JordanK_EA
Expert Alumni

Get your taxes done using TurboTax

Hi @smlambert10! The $10,200 Unemployment Income exemption was to reduce your taxable income by $10,200. It was not a credit for that dollar amount. The difference being that a credit is money that is given back to you dollar for dollar against tax owed, versus a reduction in income which your tax owed is then calculated from. The American Rescue Plan made it so the first $10,200 of Unemployment Income was tax-free, meaning that it reduced your income, and by proxy the total tax you owed. The IRS automatically made the adjustment for any additional refund from a reduction in tax owed, and it sounds like yours turned out to be $533. 

 

Additional information can be found here:

https://blog.turbotax.intuit.com/tax-news/am-i-eligible-for-the-new-unemployment-income-relief-49427...

https://www.irs.gov/newsroom/irs-to-recalculate-taxes-on-unemployment-benefits-refunds-to-start-in-m...

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