![]() ![]() State Unemployment Compensation Exclusionīecause Iowa is a state that automatically conforms with the Internal Revenue Code, certain unemployment compensation will not be included in Iowa income. Interest on unpaid taxes covered by this Order shall be due beginning on June 2, 2021. No late-filing or underpayment penalties shall be due for qualifying taxpayers who comply with the extended filing and payment deadline in this Order. For more information see the Department's COVID-19 FAQs. The Order does not include business filers and other tax types for individuals. Specifically, the Order allows Iowa residents or non-resident individuals required to file Iowa returns an extension for filing the IA 1040 Individual Income Tax Return and all supporting forms and schedules, and any associated tax payments, including quarterly estimated income tax payments due April 30, 2021. Paulsen said the state’s economy is showing good strength and the filing extension is an appropriate step to help Iowans whose lives have been disrupted by the pandemic. The changes are the result of Order 2021-01 signed by Director of Revenue Kraig Paulsen earlier today. ![]() For others, instructions and an updated worksheet about the exclusion were available in March and posted to IRS.gov/Form1040.Des Moines, Iowa – The Iowa Department of Revenue has extended the filing and payment deadline to Jfor 2020 individual income tax returns and first quarter estimated income tax payments for individuals from the Apstatutory deadline. See New Exclusion of up to $10,200 of Unemployment Compensation for information and examples. The IRS has worked with the tax return preparation software industry to reflect the updates so people who choose to file electronically simply need to respond to the related questions when electronically preparing their tax returns. There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return. The IRS will then adjust returns for those married filing jointly taxpayers who are eligible for the up to $20,400 exclusion and others with more complex returns. The IRS will do recalculations in two phases, starting with those taxpayers eligible for the up to $10,200 exclusion. The first refunds are expected to be made in May. Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed. The legislation excludes only 2020 unemployment benefits from taxes.įor those taxpayers who already have filed and figured their tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation and tax. The legislation, signed on March 11, allows taxpayers who earned less than $150,000 in modified adjusted gross income to exclude unemployment compensation up to $20,400 if married filing jointly and $10,200 for all other eligible taxpayers. The IRS recently announced it will take steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan. ![]()
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