English
Español
LOGIN SEARCH

Small Business Owner or Self-Employed? Tax Prep, Cloud Bookkeeping, and Online Payroll. Existing Clients? LOGIN

Log in
  • File With a Pro
    • Virtual “No Touch” Tax Prep
    • Drop Off
    • Schedule an Appointment
    • About Us
  • Virtual Tax Prep
  • Small Business Services
    • File your Small Business Taxes
    • File your 1099 Forms
    • Cloud Bookkeeping
    • Online Payroll
  • Find An Office
  • Tools & Resources
    • Refer A Friend
    • File a Tax Extension
    • Crypto Tax
    • Track My Refund
    • File Online
    • Daniel Ahart Tax Blog
    • Newsletter
    • Life Events Library
    • Worksheets
    • Infographics
    • FAQs
  • Contact Us
  • File With a Pro
    • Virtual “No Touch” Tax Prep
    • Drop Off
    • Schedule an Appointment
    • About Us
  • Virtual Tax Prep
  • Small Business Services
    • File your Small Business Taxes
    • File your 1099 Forms
    • Cloud Bookkeeping
    • Online Payroll
  • Find An Office
  • Tools & Resources
    • Refer A Friend
    • File a Tax Extension
    • Crypto Tax
    • Track My Refund
    • File Online
    • Daniel Ahart Tax Blog
    • Newsletter
    • Life Events Library
    • Worksheets
    • Infographics
    • FAQs
  • Contact Us
English
Español
LOGIN
Home » Blog » Unemployment Compensation Is Taxable

Unemployment Compensation Is Taxable

June 16, 2021 by Daniel Ahart Tax Service®

Share

Tax Treatment of Unemployment Compensation

The Internal Revenue Service (IRS) announced (IR-2021-71) on March 31, 2021 that it would take steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan.

Please keep in mind that unemployment compensation is taxable, as stated on this IRS article. However, the American Rescue Plan Act of 2021 allows an exclusion of unemployment compensation of up to $10,200 for individuals for taxable year 2020. In the case of married individuals filing a joint Form 1040 or 1040-SR, this exclusion is up to $10,200 per spouse. To qualify for this exclusion, your adjusted gross income (AGI) must be less than $150,000. This threshold applies to all filing statuses and it doesn’t double to $300,000 if you are married and file a joint return. Any unemployment compensation in excess of $10,200 ($10,200 per spouse if married filing jointly) should still be included on the tax return as taxable income.

Already filed a tax return?

In most cases, if you already filed a tax return that includes the full amount of your unemployment compensation, the IRS will automatically determine the correct taxable amount of unemployment compensation and the correct tax. If you paid more than the correct tax amount, the IRS will either refund the overpayment or apply it to other outstanding taxes owed. The first refunds are expected to be made in May and will continue throughout the summer. There is no need to call the IRS or file a Form 1040-X, Amended U.S. Individual Income Tax Return. See IRS to recalculate taxes on unemployment benefits; refunds to start in May for guidance. However, if as a result of the excluded unemployment compensation you now qualify for deductions or credits not claimed on your original return, you should file an amended return. For example, if you did not claim the Earned Income Tax Credit (EITC) on your originally filed return because your AGI was too high, but the exclusion allowed for unemployment compensation now reduces your AGI, you should file an amended return to claim the credit if now eligible.

Preparing your tax return now?

If you are preparing you own tax return, you must determine if you are eligible for the exclusion by considering whether your AGI is less than $150,000. Filing electronically is the easiest way to calculate the correct amount. The IRS has worked with the tax return preparation software industry to reflect these updates so people who choose to file electronically simply need to respond to the related questions when electronically preparing their tax returns. See New Exclusion of up to $10,200 of Unemployment Compensation for for information and examples. For others, instructions and an updated worksheet about the exclusion were available in March and posted to IRS.gov/form1040. These instructions can assist taxpayers who have not yet filed to prepare returns correctly.

For additional information and scenarios, see the Unemployment Compensation Exclusion FAQs.

Georgia Reinstates Pre Pandemic Unemployment Insurance Requirements

In accordance with the plan for reemployment and the announcement to no longer participate in the federal unemployment insurance (UI) programs enacted through the CARES Act and the American Rescue Plan Act, the Georgia Department of Labor (GDOL) will reinstate many of the eligibility requirements waived during the recent pandemic. The last payable week for Pandemic Unemployment Assistance (PUA), Pandemic Emergency Unemployment Compensation (PEUC), Federal Pandemic Unemployment Compensation (FPUC), and Mixed Earner Unemployment Compensation (MEUC) is week ending June 26, 2021, reinstating additional requirements on June 27 for claimants and employers. For more information about this, please click here.

“Effective June 27, 2021, the relief for unemployment benefit charging will end regardless of the reason for unemployment. Unemployment benefits paid for weeks ending on or after June 27, 2021, will be charged to the most recent employer under the law section OCGA 34-8-43,” says Daniel Ahart, chief tax officer at the tax preparation company Daniel Ahart Tax Service®

If you need help with filing your taxes, please contact us at your earliest convenience. Schedule a consultation with your tax experts now.

Additional Help with Food and Bills

Schedule An Appointment

Appointments are encouraged so that we are able to limit the number of people in our office.  We ask that you come by yourself or with your spouse.  Don’t bring extra people such as children.

Use our tool to find the office nearest you or click on a city link below.  You will find office information and a link to schedule and manage your appointment on the office page.

Search For An Office

Select office for contact information or to schedule an appointment.

      Corporate Headquarters

      Daniel Ahart Tax Service®

      303 Perimeter Center North,
      Suite 300
      Atlanta, GA 30346

      Fax (770) 290-8510

      Alpharetta

      Daniel Ahart Tax Service®

      5670 Atlanta Highway, Suite A
      Alpharetta, GA 30096
      Phone (678) 624-0562

      View details
      Schedule Appointment
      Contact Us

      Athens

      Daniel Ahart Tax Service®

      3701 Atlanta Highway, Suite 21
      Athens, GA 30606
      Phone (678) 661-0555

      View details
      Schedule Appointment
      Contact Us

      Cartersville

      Daniel Ahart Tax Service®

      1130 N Tennessee Street, Suite B
      Cartersville, GA 30120
      Phone (770) 382-5996

      View details
      Schedule Appointment
      Contact Us

      Conyers

      Daniel Ahart Tax Service®

      1369 Iris Drive NW
      Conyers, GA 30013
      Phone (770) 761-7876

      View details
      Schedule Appointment
      Contact Us

      Cumming

      Daniel Ahart Tax Service®

      113 Merchants Square
      Cumming, GA 30040
      Phone (678) 456-8487

      View details
      Schedule Appointment
      Contact Us

      Doraville

      Daniel Ahart Tax Service®

      3820 Pleasantdale Road, Suite A2
      Doraville, GA 30340
      Phone (770) 458-1040

      View details
      Schedule Appointment
      Contact Us

      Duluth

      Daniel Ahart Tax Service®

      4771 Britt Road
      Norcross, Ga 30093
      Phone (678) 957-9346

      View details
      Schedule Appointment
      Contact Us

      Dunwoody

      Daniel Ahart Tax Service®

      1050 Crown Pointe Pkwy, Suite 500
      Atlanta, GA 30338
      Phone (404) 748-4318

      View details
      Schedule Appointment
      Contact Us

      Eatonton

      Daniel Ahart Tax Service®

      615 N Jefferson Avenue
      Eatonton, GA 31024
      Phone (706) 749-2029

      View details
      Schedule Appointment
      Contact Us

      Forest Park

      Daniel Ahart Tax Service®

      5991 Old Dixie Highway, Suite B
      Forest Park, GA 30297
      Phone (404) 835-2597

      View details
      Schedule Appointment
      Contact Us

      Gainesville

      Daniel Ahart Tax Service®

      851 Main Street
      Gainesville, GA 30501
      Phone (678) 450-1202

      View details
      Schedule Appointment
      Contact Us

      Lawrenceville

      Daniel Ahart Tax Service®

      1098 Herrington Road, #13
      Lawrenceville, GA 30044
      Phone (678) 502-7246

      View details
      Schedule Appointment
      Contact Us

      Lilburn

      Daniel Ahart Tax Service®

      4562 Lawrenceville Hwy NW Ste 210
      Lilburn, GA 30047
      Phone (678) 380-5200

      View details
      Schedule Appointment
      Contact Us

      Mableton

      Daniel Ahart Tax Service®

      780 Veterans Memorial Parkway
      Mableton, GA 30126
      Phone (770) 948-6916

      View details
      Schedule Appointment
      Contact Us

      Norcross

      Daniel Ahart Tax Service®

      4771 Britt Road, Suite 107
      Norcross, GA 30093
      Phone (678) 261-7972

      View details
      Schedule Appointment
      Contact Us

      Riverdale

      Daniel Ahart Tax Service®

      7582 Highway 85
      Riverdale, GA 30274
      Phone (770) 472-7191

      View details
      Schedule Appointment
      Contact Us

      Rome

      Daniel Ahart Tax Service®

      615 N Jefferson Avenue
      Rome, GA 30165
      Phone (706) 237-6048

      View details
      Schedule Appointment
      Contact Us

      Roswell

      Daniel Ahart Tax Service®

      10684 Alpharetta Highway #300
      Roswell, GA 30076
      Phone (770) 640-9050

      View details
      Schedule Appointment
      Contact Us

      Stockbridge

      Daniel Ahart Tax Service®

      5627 N Henry Blvd, Suite 105
      Stockbridge, GA 30281
      Phone (770) 506-1816

      View details
      Schedule Appointment
      Contact Us

      Winder

      Daniel Ahart Tax Service®

      122 West May Street, Suite B
      Winder, GA 30680
      Phone (678) 963-0691

      View details
      Schedule Appointment
      Contact Us

      Woodstock

      Daniel Ahart Tax Service®

      300 Village Center Drive, Suite 108
      Woodstock, GA 30188
      Phone (404) 902-8020

      View details
      Schedule Appointment
      Contact Us

      Need help selecting the right option for you?

      Contact Us
      LOGIN

      Follow Us

      Facebook Instagram Tiktok

      Contact Us

      Find an Office

      Corporate Headquarters

      Daniel Ahart Tax Service®
      303 Perimeter Center North
      Suite 300
      Atlanta, GA 30346

      Phone: (888) 963-1040
      Call or text

      Fax: (770) 290-8510

      Ways to File

      Virtual “No Touch” Tax Prep

      Drop Off

      Office Appointment

      File Online

      About Us

      Tools & Resources

      Track My Refund

      Pay My Tax

      1040 Tax Calculator

      Financial Calculators

      Newsletter

      Life Events

      © 2022. Daniel Ahart Tax Service®. Most offices independently owned and operated. | Terms of Use | Privacy Notice