JACKSONVILLE, Fla. — The American Rescue Plan is now offering significant relief for anyone who collected an unemployment payment in 2020.
The American Rescue Plan exempts the first $10,200 of benefits earned in 2020 from federal income taxes, as long as the household income is less than $150,000.
This is great news for those, like Paul Santiago, who didn’t have taxes taken out of their payments.
“I’m happy to hear the news,” Santiago said. “It’s going to save me a few thousand dollars actually.”
Tracy Franks, owner of Directax in Arlington said she’s had clients come in who didn’t even realize they should have had taxes taken out of their payments.
“The tax bill they had, due to that, some people were really upset about it,” Franks said. “With this tax law change, which is awesome for them, now they don’t have to be as concerned. The liability decreased and they can actually have a monetary refund now.”
Franks says the many people who already had taxes taken out of their payments should get the money back in their tax return.
“They will get this full deduction from the taxes that were withheld from their unemployment,” Franks said.
The IRS hasn’t announced how someone who already filed their taxes should go about getting this fixed. Franks says it will most likely be by amending your tax return.
Unemployment Expert Vanessa Brito said she's watched unemployed Floridians lose their homes, cars and hope. This will definitely be a well-needed boost.
“A thousand dollar tax forgiveness is going to go a long way,” Brito said.
If you already filed your taxes, Brito suggests holding off on additional steps until the IRS gives more direction most likely in the coming week.
“My recommendation is don’t start filing amendments right now because you may have to do it again,” Brito said.