NYS Treatment of Unemployment
On April 8, 2021, New York State announced that unemployment benefits that are excluded from federal gross income must be added back to income for the purpose of the New York personal income tax.
New York has updated the instructions for Form IT-558, New York State Adjustments due to Decoupling from the IRC, to include a new code for this add-back. The adjustment code is A-011.
IRS Refunds for Unemployment Exclusion
On March 31, 2021, in IR-2021-71, the IRS announced that it will begin sending refunds to taxpayers who received unemployment benefits and are eligible for the exclusion on up to $10,200 of benefits but who filed their tax return before the recent changes made by the American Rescue Plan.
Such refunds will occur in the spring and summer, starting in May 2021.
The IRS indicated that, for taxpay...
IRA Contribution Due Date
In Notice 2021-21, the IRS announced that the due date to contribute to an IRA for the 2020 tax year is May 17, 2021, matching the filing due date.
The later due date also applies for contributions for health savings accounts.
The due date for making first quarter estimated taxes for the 2021 tax year remains April 15, 2021.
IRS Updates Unemployment Exclusion Threshold
As discussed in earlier posts, the American Rescue Plan, which was enacted on March 11, 2021 provides a retroactive exclusion for unemployment benefits received during 2020 (up to $10,200 per taxpayer). This exclusion is available for taxpayers with adjusted gross income of under $150,000.
In its original guidance, the IRS indicated that, when computing income for the purpose of this thresho...