Unemployment Benefits
The ARP allows for the first $10,200 in unemployment benefits as non-taxable, but only for people who made less than $150,000 in 2020. Anyone who has already filed their tax return and was on unemployment in 2020 will likely need to amend their tax return to recoup these taxes but we aren’t totally sure about this yet. Unfortunately, the timing on this is going to take a while. The IRS is going to have to write regulations on this, implement it into the tax code, get the information out to the tax software companies, and then the software companies are going to have to implement those changes on their end. This means we will need to hold off filing your tax return until these changes are in place, and possibly means that we will need to file an extension for you.
April 15th filing deadline
So far, the IRS has been adamant about not extending the normal April 15th filing deadline. However, I strongly believe the deadline will once again be extended as it was last year. We don’t know that for sure but it’s hard to imagine the IRS not giving us some grace that is badly, badly needed. And, if the IRS decides to change the April 15th deadline, it’s going to be up to your individual state whether their tax deadline is going to be extended as well. Most states pushed back their filing deadlines to coincide with the July 15th deadline, but a handful of states did not.