The Tax Service (IRS) began giving tax refunds to those who received unemployment benefits in 2020, with around 1.5 million refunds sent, adding to nearly nine million already distributed since May 2021.
Now the question on the lips of many people is whether there will be any further unemployment income tax exclusions to come in the near future.
Is further unemployment tax relief on the way?
As it is American Rescue Plan Act of 2021, which aims to relieve people who received unemployment benefit in 2020, there is an exclusion ceiling of up to $ 10,200 of their unemployment benefits from their gross income, as long as the modified adjusted gross income (AGI) is less than 150,000.
In the case of married couples who file their tax return together, the sum of 10,200 is applied to each spouse.
It should be noted, however, that these tax breaks came after millions of Americans had already filed their annual tax returns.
As a result, the IRS is now in the process of refunding any excess tax payment someone may have made.
As of May of this year, the IRS has sent 8.7 million UI refunds that exceed $ 10 million and the agency will continue to review these tax breaks.
Will there be tax relief for the unemployed in 2022?
Unfortunately, another tax break for the unemployed is unlikely to materialize in 2022. Even though the unemployment figures have increased in 2021, Congress is unlikely to allow another tax break on unemployment income because the cost would be difficult to cover.
In addition, the expected improvement in the labor market would also make further unemployment tax relief difficult to defend in Congress.