Update – Unemployment Exclusion
The Internal Revenue Service has announced that it will take steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan.
The IRS states:
“There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return.”
You’ll want to review returns filed with unemployment compensation prior to the exclusion to determine which returns need to be amended in order to receive any additional federal or state tax break(s).
TIP: To generate a report showing returns that contain unemployment compensation, follow the instructions in this Drake Knowledge Base article 16991.
Source: IRS News Release – IRS to recalculate taxes on unemployment benefits; refunds to start in May