The bill makes the first $10,200 of federal unemployment income ($20,400 for married filing jointly) tax-free for households with income less than $150,000. The legislation excludes only 2020 federal unemployment benefits from taxes, not unemployment income received in 2021.
When will I get my additional unemployment refund from the IRS?
According to the IRS, they will send payments in two phases:
- Phase 1: The IRS will adjust returns for taxpayers eligible for up to $10,200 exclusion. Payments for phase 1 are expected to start in May.
- Phase 2: The IRS will adjust returns for those married filing jointly taxpayers who are eligible for the up to $20,400 exclusion and others with more complex returns. No specific timing has been given for phase 2 payments.
The good news is the the IRS has reviewed the first round of Unemployment Calculation Exclusion (UCE) for about 21,000 filers.
