That we need to ask this question indicates the chaos gripping this year’s tax season: Last week, Congress passed the American Rescue Plan Act, which includes tax law changes for the 2020 fiscal year. The bill passed four weeks after the IRS began accepting 2020 tax returns. In the words of one tax adviser, this is a “dumpster fire.”
If you already filed your 2020 return, you may eventually need to file an amended return if:
- You received unemployment in 2020. The stimulus bill exempts the first $10,200 of unemployment income from federal tax if your AGI is under $150,000 (or $20,400 for couples with a combined AGI under $150,000).
Depending on your tax bracket, that could add to your tax refund or lead to a lowered tax bill. It also could lower your taxable income, which is used to determine your state income tax liability, as well as your eligibility for other tax credits.
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