Common questions on the 2020 Unemployment Compensation Exclusion

As part of the American Rescue Plan, the first $10,200 worth of unemployment payments are now tax-free for households with modified adjusted gross incomes less than $150,000. This expanded tax relief was for tax year 2020 returns.

How do I report the exclusion?

Select your program to view the steps to generate the exclusion on your clients' returns.

• ProSeries
• Lacerte
• ProConnect

Do I need to amend returns to update unemployment?

Check your state below to see if you need to amend your state return to get the $10,200 of unemployment income benefits according to the American Rescue Plan.

Federal

For most clients, there's no need to file an amended return to figure the unemployment exclusion. The IRS will refigure the tax amount for affected clients using the UCE and adjust their accounts. Any additional refunds due will be sent directly to your clients.

However, if the exclusion made your client eligible to claim a credit or deduction that they couldn't take before, you may need to file a 1040X. See the IRS news release for more information.

No. Alabama doesn’t tax unemployment income, so there’s no need to amend for your state. Visit the Alabama Department of Revenue for more information.

Arizona hasn’t announced their recommendations for amending state returns to claim the $10,200 unemployment adjustment. See the Arizona Department of Revenue notice for more information.

No. Arkansas doesn’t tax unemployment income, so there’s no need to amend for your state. See the Arkansas Department of Finance and Administration notice for more information.

No. California doesn’t tax unemployment income, so there’s no need to amend for your state. Visit the California Franchise Tax Board for more information.

No. Your Colorado return included the necessary unemployment income changes when you filed. See the Colorado Department of Revenue press release for more information.

Yes. Connecticut recommends amending your return to claim the $10,200 unemployment adjustment. File Form CT-1040X, Amended Connecticut Income Tax Return for Individuals. See the Connecticut State Department of Revenue Services alert for more information.

No. Delaware doesn’t tax unemployment income, so there’s no need to amend for your state. Visit the Delaware Division of Revenue for more information.

The District of Columbia hasn’t announced their recommendations for amending state returns to claim the $10,200 unemployment adjustment. See the DC Office of Tax and Revenue blog post for more information.

No. Your Georgia return included the necessary unemployment income changes when you filed. See the Georgia Department of Revenue update for more information.

Hawaii hasn’t announced their recommendations for amending state returns to claim the $10,200 unemployment adjustment. See the Hawaii Department of Taxation updates.

No. However, if unemployment was excluded on the federal return without being added back for Idaho purposes, clients may need to amend. Visit the Idaho State Tax Commission for more information.

No. Illinois does not recommend amending your return to claim the $10,200 unemployment adjustment. They will automatically make this calculation for you and send any additional refund you may be eligible for. See the Illinois Department of Revenue update for more information.

Indiana hasn’t announced their recommendations for amending state returns to claim the $10,200 unemployment adjustment. Visit the Indiana Department of Revenue for more info.

No. Iowa doesn’t recommend amending your return to claim the $10,200 unemployment adjustment. They will automatically make this calculation for you and send any additional refund you may be eligible for. See the Iowa Department of Revenue update for more information.

Yes. Kansas recommends amending your return to claim the $10,200 unemployment adjustment. File an amended Form K40, Kansas Individual Income Tax. Visit the Kansas Department of Revenue for more information.

No. However, if unemployment was excluded on the federal return without being added back on the Schedule M, line 5, clients may need to amend. See the Kentucky Department of Revenue news page for more information.

Yes. Louisiana recommends amending your return to claim the $10,200 unemployment adjustment. File an amended Form IT-540, Louisiana Resident Income Tax Return. See the Louisiana Department of Revenue news release for more information.

Yes. Maine recommends amending your return to claim the $10,200 unemployment adjustment. File an amended Form 1040ME, Maine Individual Income Tax. Visit Maine Revenue Services for more information.

Yes. Maryland recommends amending your return to claim the $10,200 unemployment adjustment. File Form 502X, Maryland Amended Tax. See the Comptroller of Maryland news release for more information.

No. Massachusetts does not recommend amending your return to claim the $10,200 unemployment adjustment. They will automatically make this calculation for you and send any additional refund you may be eligible for. See the Massachusetts Department of Revenue FAQ for more information.

Yes. Michigan recommends amending your return to claim the $10,200 unemployment adjustment. File an amended Form MI-1040. See the Michigan Taxes notice for more information.

No. Your Minnesota return included the necessary unemployment income changes when you filed. Visit the Minnesota Department of Revenue for more information.

No. However, if unemployment was excluded on the federal return without being added back for Mississippi purposes, clients may need to amend. Visit the Mississippi Department of Revenue for more information.

Yes. Missouri recommends amending your return to claim the $10,200 unemployment adjustment. File an amended Form MO-1040, Individual Income Tax Return. See the Missouri Department of Revenue FAQ for more information.

No. Montana doesn’t tax unemployment income, so there’s no need to amend for your state. See the Montana Department of Revenue post for more information.

Nebraska hasn’t announced their recommendations for amending state returns to claim the $10,200 unemployment adjustment. See the Nebraska Department of Revenue FAQ for more information.

No. New Hampshire doesn’t tax unemployment income, so there’s no need to amend for your state. Visit the New Hampshire Department of Revenue for more information. 

No. New Jersey doesn’t tax unemployment income, so there’s no need to amend for your state. Visit the New Jersey Division of Taxation for more information.

Yes. New Mexico recommends amending your return to claim the $10,200 unemployment adjustment. File an amended Form PIT-1, Personal Income Tax Return. See the New Mexico Taxation and Revenue bulletin for more information.

No. However, if unemployment was excluded on the federal return without being added back for New York purposes, clients may need to amend. See the New York Department of Taxation and Finance FAQ for more information.

No. However, if unemployment was excluded on the federal return without being added back for North Carolina purposes, clients may need to amend. See their latest announcement.

No. North Dakota does not recommend amending your return to claim the $10,200 unemployment adjustment. They will automatically make this calculation for you and send any additional refund you may be eligible for. See the North Dakota Tax Commissioner news release for more information.

Ohio hasn’t announced their recommendations for amending state returns to claim the $10,200 unemployment adjustment. See the Ohio Department of Taxation resource page for more information.

Yes. Oklahoma recommends amending your return to claim the $10,200 unemployment adjustment. File an amended Form 511, Income Tax Return. See the Oklahoma Tax Commission public notice for more information.

No. Oregon does not recommend amending your return to claim the $10,200 unemployment adjustment. They will automatically make this calculation for you and send any additional refund you may be eligible for. See the Oregon Newsroom post for more information.

No. Pennsylvania doesn’t tax unemployment income, so there’s no need to amend for your state. Visit the Pennsylvania Department of Revenue for more information.

No. However, if unemployment was excluded on the federal return without being added back for Rhode Island purposes, clients may need to amend. See the Rhode Island Division of Taxation announcement for more information.

No. Your South Carolina return included the necessary unemployment income changes when you filed. See their latest announcement for more information.

No. Tennessee doesn’t tax unemployment income, so there’s no need to amend for your state. Visit the Tennessee Department of Revenue for more information.

No. Utah does not recommend amending your return to claim the $10,200 unemployment adjustment. They will automatically make this calculation for you and send any additional refund you may be eligible for. See the Utah Tax Commission news page for more information.

No. Vermont does not recommend amending your return to claim the $10,200 unemployment adjustment. They will automatically make this calculation for you and send any additional refund you may be eligible for. See the Vermont Department of Taxes resource page for more information.

No. Virginia doesn’t tax unemployment income, so there’s no need to amend for your state. Visit Virginia Tax for more information.

Yes. West Virginia recommends amending your return to claim the $10,200 unemployment adjustment. File an amended Form IT-140, Personal Income Tax Return. See the West Virginia Tax Department for more information.

No. Your Wisconsin return included the necessary unemployment income changes when you filed. See the Wisconsin Department of Revenue news page for more information.