Non Taxable Unemployment and AGI

Forum|Forum|5 years ago
March 14, 2021
2 replies
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Does anyone know if the $150,000 AGI limit for the new unemployment exclusion includes or excludes the unemployment? I'm trying to determine if my one client that made $154,000 will get the tax free unemployment if she's able to exclude it from the AGI calculation?

Lacerte Tax

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rbynaker

Level 13

According to the IRS Worksheet (posted on the website on Friday evening--so take that for what it's worth) you "Include the full amount of unemployment compensation you received in 2020 on Schedule 1, line 7."

https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemployment-compensation

If not covered under a retirement plan you might see if a deductible IRA contribution would help. You might also do an analysis of MFJ vs MFS.