Unemployment benefits regarding Obamacare

[Dsarno281]

Living in Texas with no State income tax, I have a few questions:

1.) Is any 2020 unemployment compensation taxable at the Federal level? I have already paid Federal tax on what the State of Texas paid me.

If that is non taxable, can I submit an amended return for 2020 to recover the tax I paid in that income?

2.) Again, if the unemployment compensation is non taxable, it would put me in a position to receive Obamacare at a lower premium. I’ve already paid $1740 in extra premium as the unemployment compensation put me past the income threshold for a lower premium. My question is, if the unemployment compensation is not taxable, would it also lower my income so I would pay the lower healthcare premiums based on income?

Thank you-

[VolvoGirl]

Yes unemployment is taxable on the federal return.  That's why they take out federal tax withholding.  You enter the gross unemployment and the withholding on your tax return.  The first 10,200 of Unemployment will be tax free.  Your unemployment compensation will be on 1040 Schedule 1 line 7.  The exclusion will be on Schedule 1 Line 8 as a negative number. The result flows to Form 1040 Line 8.

Did you already file?  

If you filed early before the exclusion, the IRS will recalculate your return for the new 10,200 unemployment exemption for you. 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.

No way to track it.  Just keep waiting.  The IRS is sending them out in batches over the summer.

See IRS news July 13, 2021

https://www.irs.gov/newsroom/irs-readies-nearly-4-million-refunds-for-unemployment-compensation-over...

[Dsarno281]

Thank you.. as a follow up, would the $10,000 exemption be subtracted from my adjusted gross income for calculation of healthcare premiums?

thank you