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If modified adjusted gross income (AGI) is less than $150,000, the new law excludes from income, up to $10,200 of unemployment compensation paid in 2020.

  • If you are married, each spouse receiving unemployment compensation doesn’t have to pay tax on unemployment compensation of up to $10,200

  • Amounts over $10,200 for each individual are still taxable

  • If modified AGI is $150,000 or more all unemployment compensation is taxable

For those taxpayers that have not yet filed their 2020 tax return, our software has been updated to reflect the changes to the Form 1040, Schedule 1 - Additional Income and Adjustments to Income. Returns filed prior to version US2021.25 did not receive this automatic exclusion. 

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