For example, if you claim $60,000 of income on your taxes but then realize after you file that you neglected to include another $5,000 of freelance earnings, you'd file an amended return with the correct amount. Normally, amended tax returns come into play when a person's tax liability changes, for better or for worse. If that's the case, don't rush to file an amended tax return. The IRS is expected to issue guidance on the matter shortly, and since there's still roughly another month between now and when taxes are due, you should be in a position to sit tight and wait.īut what if you rushed to file your 2020 taxes already, either to get the task over with or to expedite your tax refund? You may have either already paid taxes on that $10,200 in unemployment benefits up front (by having federal tax withheld when you got your benefits), or you may have paid those taxes along with your return. If you collected unemployment benefits in 2020 and haven't yet filed last year's return, your best bet is to hold off. Here's what to do if that situation applies to you. And that means they've already paid taxes on their unemployment benefits and didn't claim a refund.
There's just one problem - a lot of people have already filed their 2020 tax returns. This rule works to a lot of people's advantage, as paying less tax means getting to keep more of their unemployment benefits to themselves. This rule applies to those with an income of less than $150,000 in 2020. But as part of the new relief bill, jobless workers are entitled to a federal tax break on their first $10,200 of unemployment benefits. Normally, unemployment benefits are taxed at the federal level and some states impose their own taxes on them as well.
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