UPDATED: April 1, 2021
The American Rescue Plan makes the first $10,200 of unemployment payments per taxpayer, tax-free on your federal tax return for households with an annual income under $150,000.
The IRS, and most states, consider unemployment payments as taxable income, which means that you have to pay tax on these payments and report them on your return. With this new law, if your household income is less than $150,000, the first $10,200 of unemployment per taxpayer, will be tax free on your federal tax return, but any amount you receive above that will be taxed.
We are actively working to update the states to account for these new federal changes.
Select your state below to find out whether our calculations currently support the way unemployment income is treated.