Federal American Rescue Plan Act paid with unemployment - is it taxable for 2021?

[AmberSp]

When filing 2020 taxes (in 2021), the Federal American Rescue Plan Act weekly bonus pay with unemployment was not taxed. To clarify, are any of these payments received in 2021 taxable when filing this year? If so, do these payments only get taxed on a Federal level, or State as well?

[RobertB4444]

Yes, there is no allowance for non-taxable unemployment for this year.

The rules on the taxability of unemployment vary from state to state.  You'll need to look at your state to find out.