The American Rescue Plan exempts the first $ 10,200 in benefits earned in 2020 from federal income tax as long as the household income is less than $ 150,000.
JACKSONVILLE, Florida – The American bailout plan now offers significant relief for anyone who received unemployment benefits in 2020.
The American Rescue Plan exempts the first $ 10,200 in benefits earned in 2020 from federal income tax as long as the household income is less than $ 150,000.
This is great news for those like Paul Santiago who didn’t deduct taxes from their payments.
“I’m glad to hear the news,” said Santiago. “It will actually save me a few thousand dollars.”
Tracy Franks, owner of Directax in Arlington, said she has customers who didn’t even realize they should have deducted tax from their payments.
“The tax bill they had because of this some people were really upset about,” Franks said. “With this tax law change, which is great for you, you don’t have to be so concerned now. Liability has decreased and you can now actually get a refund. “
Franks says the many people who have already deducted taxes from their payments should get the money back on their tax returns.
“You will get this full deduction from taxes withheld from your unemployment,” Franks said.
The IRS has not announced how someone who has already filed their taxes will proceed to resolve this. Franks says that it will most likely be done by changing your tax return.
Unemployment expert Vanessa Brito said she watched unemployed Floridians lose their homes, cars and hope. This will definitely be a much needed boost.
“A thousand dollars in tax forgiveness will go a long way,” said Brito.
If you have already filed your taxes, Brito suggests pausing further action until the IRS most likely gives more instructions in the coming week.
“My recommendation is not to start tabling amendments now as you may have to do this again,” said Brito.