American Rescue Plan Cancels Unemployment Pay Tax for Many
The $1.9 trillion American Rescue Plan might keep many people from paying taxes on some 2020 pay.
Taxes for unemployment pay in 2020 are getting canceled for many people who received it. Under the American Rescue Plan, those whose adjusted gross income was less than $150,000 in 2020 do not have to pay state or federal tax on up to $10,200 of the unemployment pay they received. If you have not filed your 2020 taxes yet, click here for the directions on how to file.
If you have already filed your taxes, the Internal Revenue Service is asking you not to file an amended return. IRS officials are unsure of how people that have already filed will be refunded, but it is likely it will end up being an automatic refund. More guidance from the Michigan Treasury will be available soon.
Please don't hesitate to file your individual income tax return, Taxpayers who think they owe taxes often wait to file right up to the filing deadline...The American Rescue Plan changes the dynamic of the 2020 tax year and this year’s filing season. A larger than anticipated refund could provide much-needed assistance during the pandemic...said Michigan State Treasurer Rachael Eubanks.
If you have not filed your 2020 taxes yet, you still have plenty of time. The deadline for tax returns has been extended this year from April 15th to Monday, May 17th at 11:59 pm. If you have any questions about your state income taxes this year, you are encouraged to contact Treasury eServices here. This online service enables you to ask tax questions more easily online.
Source: Michigan Treasury
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