Unemployement during covid

[giogis245]

HI All, 

I had heard that the covid extra $600 weren't taxable, however with a client that I have it is included in the total benefits paid... so therefore that is how it has to be filed, is that correct or am I missing something?

[Lion EA]

Taxable. https://www.irs.gov/newsroom/irs-unemployment-compensation-is-taxable-have-tax-withheld-now-and-avoid-a-tax-time-surprise

Your state may vary.

[Abby Normal]

I think the proposed new Biden bill has a provision to make the additional unemployment not taxable, but until it is signed into law, we won't know for sure. Or maybe I'm confusing it with the proposed MD law to make it nontaxable. I've read so many things that they're becoming a swirl in my head!

[Jack from Ohio]

All unemployment taxable.  Just look at the 1099-G.

[Lion EA]

Until about 15 March, unemployment is taxable. But if Biden's tax proposal passes about 14 March, you might be preparing amendments. I'm making my clients who had unemployment benefits wait to file or pay my full fee for amendments on a  FIFO basis.

[Gail in Virginia]

9 hours ago, Lion EA said:

Until about 15 March, unemployment is taxable. But if Biden's tax proposal passes about 14 March, you might be preparing amendments. I'm making my clients who had unemployment benefits wait to file or pay my full fee for amendments on a  FIFO basis.

I did not think this was in Biden's proposed bill.  I thought this was a separate proposal by Durbin and Axne.  I feel sure that Biden will go along if the bill gets any traction but i think it is a separate issue - or did they propose it as an amendment to his bill?

[Abby Normal]

The bill is just now going into reconciliation so anything is possible.

[Lion EA]

Gail is right about the origin of the bill. However, there is a bill. And, any votes appear to wait until after impeachment and are marketed to be before the current extra unemployment expires 15 March. So, keep watch. And, you might consider suggesting waiting to file.