1. For the exclusion of unemployment income, the IRS has issued new guidance on how the exclusion of unemployment benefits will be handled.
For those taxpayers who already have filed and figured their tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation and tax. Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed.
There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return.
Please read this IRS document for more information.
2. The increased child tax credit will apply only to tax year 2021. The IRS has announced that they will be sending out monthly advances staring July 2021.
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