1/16/2023 0 Comments 2020 tax brackets![]() ![]() The applicable maximum AGI depends on your filing status and the number of qualifying children. If you worked or were otherwise self-employed during the same year you started receiving unemployment checks, you may be eligible to claim the Earned Income Credit, which is only available if your adjusted gross income (AGI) is less than the applicable maximum for the tax year. Recipients should expect to receive a Form 1099-G for 2020 payments that will be reported to the Internal Revenue Service (IRS). Although unemployment compensation is taxable, tax rates drop as income does. However, any state unemployment payments, including those from state Pandemic Unemployment Assistance (PUA) programs, are taxable income. The good news: The $1,200 paid out in the spring to qualifying individuals and $600 recently in one-time federal stimulus relief payments for single filers aren’t taxable. For some people, the credits or savings could be worth thousands of dollars,” said Lisa Greene-Lewis, a certified public accountant and tax expert for TurboTax. “Be aware of the new tax credits and deductions under both relief packages. The biggest year-over-year changes to income taxes came from the two pandemic stimulus packages, the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March and the COVID relief bill approved in December. Coronavirus Aid, Relief, and Economic Security Act & COVID Relief Bill Also, some of the pandemic-related tax changes may enable you to use up to $100,000 of your retirement money without penalty for up to three years. The pandemic may have a (small) silver lining: Because of the coronavirus and its hardships, you may qualify for some new tax credits or deductions. But the IRS did grant a one-month reprieve- regular income tax filings are due May 17, 2021, for income earned in 2020. ![]() Unfortunately, paying income taxes can’t be one of them. There are many things from 2020 we’d like to forever leave behind. Two COVID-19 stimulus bills included new tax credits and deductionsĬhanges to the 2020 tax year could amount to hundreds of dollars in applicable credits or deductions ![]()
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