For married filers filing jointly, the maximum exclusion would be $ 10,200 for each spouse.
Photo: OZAN KOSE / AFP / Getty Images
The IRS is reminding eligible U.S. residents that if they receive unemployment compensation payments, they may be eligible to exclude up to $ 10,200 per person on income for 2020.
This means that taxpayers with income under $ 150,000 can exclude the first $ 10,200 of unemployment compensation from their tax return federal income tax for 2020.
For married filers filing jointly, the maximum exclusion would be $ 10,200 for each spouse up to a maximum of $ 20,400.
Taxpayers who filed a return before the law was passed should not file an amended return, as the IRS will make this adjustment.
Last year, in response to the COVID-19 pandemic, Congress passed legislation that provides eligible individuals with two new types of unemployment compensation related to the pandemic, they are subject to the same US tax rules that apply to other unemployment compensation.
These new types of compensation are:
–Pandemic Unemployment Assistance (PUA)
–Federal Pandemic Unemployment Compensation (FPUC)
The $ 10,200 exclusion applies to these new types of unemployment compensation for income tax purposes.
Residents of US territories should contact their region’s tax department with questions regarding COVID-related unemployment compensation taxes.
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