The IRS has also moved the tax-filing deadline back one month, so filers now have until May 17 instead of April 15 to submit their returns without facing penalties for being late. (Refunds for paper returns can take twice as long.) Adjusting for this change might push back some refunds, but it'll also eliminate the headache of having to file amended returns. Normally, the IRS issues refunds for electronically filed returns within three weeks. Meanwhile, those who paid taxes on last year's unemployment income and already filed their tax returns may be able to just sit back and wait for their refunds to hit.
#10200 unemployment tax break married filing jointly update
The agency is also working with tax software providers to update their systems to allow for that tax break. Last week, the IRS released filing instructions for workers who are eligible to claim a tax break on their unemployment income, including a worksheet for filers who submit a paper return. And that could save those who already submitted their taxes a lot of time and hassle. But now, the IRS says it should be equipped to handle adjustments to tax returns relating to this exemption on its own. Originally, some tax professionals thought filers in this situation would need to submit an amended tax return. At that point, a lot of people had already filed their 2020 taxes - without accounting for this new provision. The problem, however, is that the relief bill wasn't signed into law until the middle of March. Getting out of paying taxes on $10,200 of income can be a good thing.
Unemployment tax break: IRS tax refunds to start in May for $10,200 unemployment tax break: Here's what you need to know Stimulus check update: When will ‘plus-up’ payments arrive? Answers to your COVID relief questions
Normally, all unemployment income is taxable at the federal level, but the new relief bill exempts jobless workers' first $10,200 in benefits for those earning less than $150,000. Not only will jobless workers be entitled to a $300 weekly unemployment boost through early September, but they'll also get a nice break on their taxes. These include $1,400 stimulus checks, enhanced health insurance subsidies, and boosted unemployment benefits. The recently passed $1.9 trillion coronavirus relief bill contains a host of provisions designed to throw struggling Americans a bone. Watch Video: COVID-19: Who is unemployed? The unemployment rate explained
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