The American Rescue Plan was signed today. What does that mean to us preparing tax returns?
Here is the bill full text. You can use the links in the site to go to sections.
Included is the unemployment exemption for 2020. The first 10,200 is not taxable based on tax payer income.
Premium Tax Credit implication for 2020.
Plus the stimulus payments and child tax credit. These do not affect 2020 tax returns.
How will this be handled with the software? At this point we are still waiting for direction from the IRS has to how they will handle returns already filed with unemployment. You will probably want to hold on to returns that have unemployment income. I would hold off filing amended returns until we have more direction. Additionally, we do not know the state implications yet.
As we know more we will pass it along.