UNEMPLOYMENT COMPENSATION FAQs UPDATED:
Payment of unemployment compensation in 2021 despite being unemployed in 2020 is not eligible for the exclusion from gross income, the IRS announced in updated FAQs. Fact Sheet 2022-21 expands on the changes to the FAQs regarding the unemployment exclusion for 2020.
The IRS notice contains the following instructions:
For additional information about this exclusion, refer to the frequently asked questions on this page. Please do not call the IRS. IRS phone assistors don't have additional information beyond what's available on IRS.gov.
- Topic A: Eligibility
- Topic B: Calculating the Exclusion
- Topic C: Claiming the Exclusion (Before Filing)
- Topic D: Amended Return (Form 1040-X)
- Topic E: Impact to Income, Credits, and Deductions
- Topic F: Victims of Unemployment Fraud and Identity Theft
- Topic G: Receiving a Refund, Letter, or Notice (updated)
- Topic H: Finding the Unemployment Compensation Amount
- Topic I: Post Unemployment Compensation Exclusion Adjustment
- Topic J: Economic Impact Payment
The questions updated or added are as follows:
- Question 6, Topic A: Eligibility (NEW) –
- Q6. I was unemployed in 2020, but payment of my unemployment compensation was delayed until 2021. Do I qualify for the unemployment compensation exclusion? (added March 23, 2022) A6. No, the American Rescue Plan provides unemployment compensation exclusion relief only for unemployment compensation received in 2020. The exclusion does not apply to unemployment compensation that was received in 2021.
- Questions 1, 2, 4, Topic D: Amended Return (Form 1040-X)
- Question 2, Topic E: Impact to Income, Credits, and Deductions
- Question 1, 8, 9, Topic G: Receiving a Refund, Letter, or Notice
- Question 1, Topic I: Post Unemployment Compensation Exclusion Adjustment
- Question 1, Topic J: Economic Impact Payment
These FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible.
