Unemployment benefit recipients who have filed their taxes for 2020 should wait for further guidance from the IRS, the agency said in a statement Friday. People should generally hold off on amending their returns in response to various tax provisions under the American Rescue Plan , which President Joe Biden signed Thursday, several weeks into the filing season.
The legislation, which retroactively exempts the first $10,200 in unemployment benefits from tax for 2020 for people below a certain income threshold, passed the House on Wednesday in a 220-211 vote that accepted several changes made by the Senate.
The IRS also released instructions Friday for reporting the $10,200 unemployment income exclusion and detailed eligibility for the tax break under the new law. The agency said it plans on issuing guidance on various tax provisions under the legislation, which include another round of direct payments to individuals and enhancements to the child tax credit and earned income tax credit.
The IRS and U.S. Department of the Treasury began distributing the $1,400 direct payments authorized by the American Rescue Plan over the weekend.
--Additional reporting by Dylan Moroses, Stephen Cooper and Andrew Kragie. Editing by Neil Cohen.
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