American Rescue Plan - Unemployment Exclusion
The American Rescue Plan, signed into law on March 11, 2021, includes a provision that makes the first $10,200 of unemployment nontaxable for each taxpayer who made less than $150,000 in 2020. If you are married, and your spouse also received unemployment, both of you can exclude $10,200.
What if I filed my 2020 return before this law was passed?
The IRS has confirmed that taxpayers who qualify for the unemployment exclusion will not need to file an amended return. The IRS will calculate the exclusion and send the refund. For more details, see the IRS press release.
I haven't filed yet - what do I need to do?
TaxAct Federal editions have been updated to allow the unemployment exclusion. State programs will vary - see State Conformity below.
Related Links
- New Exclusion of up to $10,200 of Unemployment Compensation.
- Covid-19 Response: American Rescue Plan
State Conformity
This federal exclusion will be adopted by some states, but not all. To determine if your state will allow the unemployment exclusion at the state level, see the list below.
Alabama | Alaska | Arizona | Arkansas | California | Colorado | Connecticut | Delaware | District of Columbia | Georgia | Hawaii | Idaho | Illinois | Indiana | Iowa | Kentucky | Kansas | Louisiana | Maine | Maryland | Massachusetts | Michigan | Minnesota | Mississippi | Missouri | Montana | Nebraska | New Hampshire | New Jersey | New Mexico | New York | North Carolina | North Dakota | Ohio | Oklahoma | Oregon | Pennsylvania | Rhode Island | South Carolina | Tennessee | Utah | Vermont | Virginia | West Virginia | Wisconsin
Alabama
Alabama does not tax unemployment, so no changes are necessary to the TaxAct program.
Alaska
Alaska does not assess individual income tax.
Arizona
Arizona does not conform to the unemployment exclusion, but legislation is pending. The TaxAct Arizona program does not currently allow the unemployment exclusion..
Arkansas
Arkansas does not tax unemployment, so no changes are necessary to the TaxAct program.
California
California does not tax unemployment. The TaxAct California program has been updated to addback the federal exclusion amount.
Colorado
Colorado will not conform to the federal exclusion. The TaxAct Colorado program has been updated to addback the federal exclusion amount.
Connecticut
Connecticut will conform to the federal exclusion. The TaxAct Connecticut program currently allows the exclusion. Qualifying taxpayers who filed before March 25, 2021 will need to file an amended return
Delaware
Delaware does not tax unemployment, so no changes are necessary to the TaxAct program.
District of Columbia
No official guidance provided yet. The DC TaxAct program does not currently allow the unemployment exclusion.
Georgia
Georgia does not conform to the federal exclusion. The TaxAct Georgia program has been updated to addback the federal exclusion amount.
Hawaii
No official guidance provided yet. The Hawaii TaxAct program does not currently allow the unemployment exclusion.
Idaho
Idaho does not currently conform to the federal unemployment compensation exclusion. The TaxAct Idaho program has been updated to addback the federal unemployment exclusion amount.
Illinois
Illinois will conform to the federal exclusion. The Illinois TaxAct program currently allows the unemployment exclusion.
Indiana
Indiana does not conform to the federal exclusion., but legislation is pending. The TaxAct Indiana program has been updated to addback the federal exclusion amount. Qualifying taxpayers may want to wait to file until legislation passes.
Iowa
Iowa will conform to the federal exclusion. The Iowa TaxAct program currently allows the exclusion. Qualifying taxpayers who filed before March 18, 2021 will not need to file an amended return.
Kansas
Kansas will conform to the federal exclusion. The TaxAct Kansas program currently allows the exclusion. Qualifying taxpayers who filed before March 18, 2021 will need to file an amended return
Kentucky
No official guidance provided yet. The Kentucky TaxAct program does not currently allow the unemployment exclusion.
Louisiana
Louisiana will conform to the federal exclusion. The TaxAct Louisiana program currently allows the exclusion.
Maine
Maine recently passed legislation to conform with the $10,200 unemployment compensation exclusion allowed on the Federal return. The Maine TaxAct program currently allows the exclusion.
Maryland
Maryland will allow the full federal unemployment exclusion as well as an additional unemployment exclusion from Maryland income for MD, PA, DC, VA, and WV unemployment income if it was included in FAGI as long as FAGI is not over $75,000/$100,000 (MFJ). You may need to amend your return if you file before Maryland changes are finalized in the TaxAct program in mid-April.
Massachusetts
Massachusetts does not currently conform to the federal exclusion, but legislation is pending. The Massachusetts TaxAct program does not currently allow the unemployment exclusion. Qualifying taxpayers may want to wait to file until legislation passes.
Michigan
Michigan will conform to the federal unemployment exclusion. The Michigan TaxAct program does not currently allow the unemployment exclusion, but an update is coming soon.
Minnesota
Minnesota will not conform to the federal unemployment exclusion. The Minnesota TaxAct program has been updated to addback the federal exclusion amount.
Mississippi
Mississippi will not conform to the federal unemployment exclusion. The Mississippi TaxAct program has been updated to addback the federal exclusion amount.
Missouri
Missouri will conform to the federal exclusion. The Missouri TaxAct program currently allows the exclusion. Qualifying taxpayers who filed before March 18, 2021 will need to file an amended return.
Montana
Montana does not tax unemployment, so no changes are necessary to the TaxAct program.
Nebraska
Nebraska will conform to the federal exclusion. The Nebraska TaxAct program currently allows the exclusion.
New Hampshire
New Hampshire does not tax unemployment, so no changes are necessary to the TaxAct program.
New Jersey
New Jersey does not tax unemployment, so no changes are necessary to the TaxAct program.
New Mexico
New Mexico will conform to the federal exclusion. The New Mexico TaxAct program currently allows the exclusion.
New York
New York does not currently conform to the federal exclusion. The New York TaxAct program has been updated to addback the federal exclusion amount.
North Carolina
North Carolina does not currently conform to the federal exclusion. The North Carolina TaxAct program has been updated to addback the federal exclusion amount.
North Dakota
North Dakota will conform to the federal exclusion. The North Dakota TaxAct program currently allows the exclusion.
Ohio
At this time, no updates are needed to how your products are currently programmed for Ohio Individual Income Tax 2020. Ohio will notify all partners when the bill is signed or if there are any changes.
Oklahoma
Oklahoma will conform to the federal exclusion. The Oklahoma TaxAct program currently allows the exclusion.
Oregon
Oregon will conform to the federal unemployment exclusion. The Oregon TaxAct program currently allows the exclusion. Qualifying taxpayers who filed before March 18, 2021 will not need to file an amended return, as Oregon will make the necessary adjustments.
Pennsylvania
Pennsylvania does not tax unemployment, so no changes are necessary to the TaxAct program.
Rhode Island
Rhode Island will not conform to the federal exclusion. The Rhode Island TaxAct program has been updated to addback the federal exclusion amount. Qualifying taxpayers who filed before March 30, 2021 will need to file an amended return.
South Carolina
No official guidance provided yet, but legislation is pending. The South Carolina TaxAct program does not currently allow the unemployment exclusion.
Tennessee
Tennessee does not tax unemployment, so no changes are necessary to the TaxAct program.
Utah
Utah will conform to the federal exclusion. The Utah TaxAct program currently allows the exclusion.
Vermont
No official guidance provided yet. The Vermont TaxAct program currently allows the unemployment exclusion.
Virginia
No official guidance provided yet. The Virginia TaxAct program does not currently allow the unemployment exclusion.
West Virginia
West Virginia will conform to the federal exclusion. The West Virginia TaxAct program allows the exclusion. Qualifying taxpayers who filed before March 18, 2021 will need to file an amended return.
Wisconsin
Wisconsin will not conform to the federal unemployment exclusion. The Wisconsin TaxAct program has been updated to addback the federal exclusion amount.