Is my 2020 Unemployment Compensation Taxable? Can I Still Claim the Earned Income Credit?
Автор: College Tax Refunds
Загружено: 2021-03-14
Просмотров: 1054
This video has been updated with more information here: • Is Pandemic Unemployment Compensation Taxa...
Please watch both videos for the full information.
If you received unemployment income from your state in 2020 because of the Coronavirus or Covid-19 pandemic, you may have to pay federal income tax on your unemployment compensation. However, the American Rescue Plan Act of 2021, passed on March 11, exempts the first $10,200 of unemployment compensation per taxpayer or spouse from adjusted gross income. This means your AGI might be up to $20,400 lower because of this exclusion. This might make you eligible for the valuable Earned Income Tax Credit. Usually, unemployment compensation is taxable, and including it in your Adjusted Gross Income might make you ineligible for the Earned Income Credit. However, now that $10,200 is excluded per person, you might be eligible.
Please note: Your STATE may still tax you on the full amount of unemployment compensation you received in 2020.
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