Tax Law and News American Rescue Plan includes new exclusion of up to $10,200 of unemployment compensation Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Intuit Accountants Team Modified Apr 6, 2021 1 min read The American Rescue Plan of 2021, enacted March 11, 2021, includes a new exclusion of up to $10,200 of unemployment compensation. Basically, if your clients’ modified adjusted gross income (AGI) is less than $150,000, the American Rescue Plan excludes from income up to $10,200 of unemployment compensation paid in 2020, which means your clients don’t have to pay tax on unemployment compensation of up to $10,200. If they are married, each spouse receiving unemployment compensation doesn’t have to pay tax on unemployment compensation of up to $10,200. Amounts over $10,200 for each individual are still taxable. If modified AGI is $150,000 or more, they can’t exclude any unemployment compensation. The exclusion should be reported separately from unemployment compensation. See the updated IRS instructions and the Unemployment Compensation Exclusion Worksheet to figure the exclusion and the amount to enter on Schedule 1, lines 7 and 8. Be sure to peruse all of the Tax Law & News articles on the Intuit® Tax Pro Center. Previous Post American Rescue Plan: What does the third stimulus mean for… Next Post IRS extends filing and payment deadlines for tax year 2020 Written by Intuit Accountants Team The Intuit® Accountants team provides ProConnect™ Tax, Lacerte® Tax, ProSeries® Tax, and add-on software and services to enable workflow for its customers. Visit us at https://proconnect.intuit.com, or follow us on Twitter @IntuitAccts. More from Intuit Accountants Team Comments are closed. Browse Related Articles Tax Law and News Tax relief for victims of Hurricane Helene Workflow tools 3 guides to moving your clients to QuickBooks® Online Practice Management Intuit introduces Intuit® Enterprise Suite Practice Management Partnering to power prosperity: Intuit and the accounti… Advisory Services 7 Intuit® Tax Advisor updates Advisory Services Debunking 3 common myths about reasonable comp Tax Law and News 529 Plans: Flexibility for education expenses Webinars Are You Running a Smart Firm? Oct. 10 Webinars ProConnect™ Tax Workflow: Oct. 3 Tax Law and News Tax issues related to online crowdfunding