![]() ![]() The IRS has to go through those manually, and it’s already behind. But she said they should definitely not file an amended return. He’s planning to use it to help pay down $10,000 worth of medical debt.Įrin Collins, the IRS’ national taxpayer advocate, estimated that as many as 10 million taxpayers are in the same boat as Gannis. It’s hard for Gannis to wait for his refund. What to do if you already filed taxes but want to claim the 10,200 unemployment tax break Last Updated: Apat 12:33 p.m. “I’d rather have a process where it’s not all on them, where there’s action by me and a response by them,” he said. Then, a few days ago, the IRS announced it would recalculate their returns for them. If your filing status is married filing jointly and both spouses received unemployment benefits, both can exclude up to 10,200. The Internal Revenue Service will automatically recalculate their returns to account for the new stimulus tax break on the first 10,200 of unemployment compensation received in 2020, the. Initially it told taxpayers like Gannis to sit tight as it figured out what to do. “I’m diligent, I get my stuff in on time and then bam! I find out that, you know, $10,000 of my income is now not taxable - I got a tax break. ![]() He filed his taxes a few days before Congress passed the latest COVID-19 relief bill, which - surprise! - made the first $10,200 of 2020 unemployment benefits tax free for households with adjusted gross income below $150,000. Josh Gannis, a teacher in Tacoma, Washington, was laid off a year ago and received about $15,000 in unemployment benefits. But there’s a catch - they’ll have to wait for their refunds. Now the IRS says it will recalculate their tax returns for them. Millions of Americans filed their taxes before Congress changed the rules, making a big chunk of unemployment benefits tax free. You will be refunded 1000 in overpayment. Since you had taxes withheld you paid 2000 when now you are only supposed to owe 1000. Now this deduction removed 10k of taxable income. ![]() A press release from the IRS explained that 'the IRS will determine the correct taxable amount of unemployment compensation and tax. Sometimes it doesn’t pay to be an early bird. You received 20k in unemployment and had taxes withheld. Inside the bill is a tax refund that specifically excludes 10,200 in 2020 unemployment compensation from being taxable as a way to give those who struggled financially a break on their taxes. ![]()
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