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Romeo3
Level 1

2020 Back Unemployment Benefits received in 2021

I received the majority of my 2020 unemployment benefits that were owed to me in a lump sum in January 2021.  Is there any way I can use the $10,200 exemption that was meant for 2020 benefits, or am I stuck with no exemption because they were finally paid out to me in January 2021?

 

Thanks for any help you can offer!

1 Best answer

Accepted Solutions
Natalie A
Employee Tax Expert

2020 Back Unemployment Benefits received in 2021

Hi Romeo! Unfortunately, you would not be able take advantage of the $10,200 exclusion as the income was received in 2021. In order to be eligible for the exclusion the unemployment compensation must be received in 2020 and your modified adjusted gross income (AGI)  must be less than $150,000. The IRS has a Unemployment Compensation Exclusion FAQs page that I'm including for more information. IRS Unemployment Compensation Exclusion FAQs  

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6 Replies
Natalie A
Employee Tax Expert

2020 Back Unemployment Benefits received in 2021

Hi Romeo! Unfortunately, you would not be able take advantage of the $10,200 exclusion as the income was received in 2021. In order to be eligible for the exclusion the unemployment compensation must be received in 2020 and your modified adjusted gross income (AGI)  must be less than $150,000. The IRS has a Unemployment Compensation Exclusion FAQs page that I'm including for more information. IRS Unemployment Compensation Exclusion FAQs  

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Romeo3
Level 1

2020 Back Unemployment Benefits received in 2021

Thank you for your response ❤️

Lulu70
Returning Member

2020 Back Unemployment Benefits received in 2021

I had a similar question as I had already filed my 2020 taxes before the 10,200 exemption was offered. Can I ago back and amend my 2020 taxes to take advantage of it that way?

Natalie A
Employee Tax Expert

2020 Back Unemployment Benefits received in 2021

My pleasure Romeo, glad to help. Hi Lulu, the IRS advised taxpayers who are eligible for the unemployment exclusion that they would NOT need to amend their 2020 return, that the IRS would recalculate the return and any resulting overpayment would be sent as a refund to the taxpayer.   As a side note, there are situations were an amendment would be applicable. If the Unemployment Exclusion of up to $10,200 in unemployment compensation would now make you eligible for a credit or deduction not claimed on your original return, in that case the taxpayer would amend. The IRS has a frequently asked questions page related to this and gives examples of situations where the taxpayer would need to amend. See Question 2 Unemployment Exclusion FAQs, Amended Return 

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Bweeks51
New Member

2020 Back Unemployment Benefits received in 2021

So in 2020, someone is unemployed and files a claim for 2020. EDD delays payment for the 2020 claim and then finally gets around to paying the 2020 unemployment benefit, but due to know fault of the taxpayer they aren't given the payment until 2021. The person is expected to lose the exclusion benefit and is subject to the full taxable income in 2021, even though it had nothing to do with them and they should have received the money in 2020 and had been able to exclude $10,200 from being taxable. Sure doesn't seem right. 

ErnieS0
Expert Alumni

2020 Back Unemployment Benefits received in 2021

The IRS taxes you on income in the year received @Bweeks51. Because of this, as awesome Tax Expert @Natalie A said, you will not be able to claim the $10,200 unemployment exclusion for 2020 unemployment received in 2021.

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