Unemployment compensation received in 2020 can Only be entered on a 2020 tax return. The tax code requires All income from All sources in the tax year be entered on only One tax return for that tax year. If filing as Married Filing Jointly this requirement is for both of you.
No that is not okay at all. ALL of your 2020 income has to be entered on your 2020 tax return. You cannot pick and choose what income you want to report on your tax return. 2020 income cannot be entered on a 2021 tax return.
Unemployment compensation is taxable on your federal return.
You will have to enter a 1099G that is issued by your state.
Some states will mail out the 1099G. Or you might need to go to your state’s unemployment website and use the password, etc. that you have been using to certify for weekly benefits to get your 1099G from the state’s site.
Enter your 1099G in Federal>Wages & Income>Unemployment
Go through the screens very carefully, making sure to enter any federal/state tax you had withheld from the unemployment.
STATES THAT TAX UNEMPLOYMENT BENEFITS
AZ, AR, CO, CT, DE, DC, GA, HI, ID, IL, IN, IA, KS, KY, LA, MA, ME, MD, MI, MN, MS, MO, NB, NM, NY,NC, ND, OH, OK, OR, RI, SC, UT, VT, WV, WI
STATES THAT DO NOT TAX UNEMPLOYMENT BENEFITS on the state return
AK, CA, FL, MT, NH, NJ, NV ,PA, SD, TN, TX, VA, WA, WY