1. The first $10,200 of unemployment is retroactively exempt from Federal taxation.
2. If you would have had to repay Health Insurance Premium Tax Credits for 2020, you now do not. Just for this year.
3. New stimulus checks for $1400 per person on a tax return. This is an advance 2021 tax credit, but it will go out based on the most recent return on file, 2019 or 2020. If you do not qualify based on that return but do based on 2021, you will get your $1400 when you file 2021. You will not have to repay it if you get it despite not qualifying based on 2021. Like the last stimulus, it's going out right away to whatever bank account or address is on file, and if there is any error you may have to do a payment trace, or wait til next year.
So what happens now?
If you have not yet filed, continue as normal, and I will hold your return if you have unemployment or payback of premium tax credits until the IRS issues guidelines and I get a software patch. That might be a couple of weeks. Please do not delay your appt or sending me your info, as of 3/11 there has not been an extension of tax season. 80% of my clients got unemployment, if you all wait then I will run out of space! If we get an extension and get some breathing room, I will update this post!
If you have already filed with me and you had unemployment or paid back health insurance credits (and thus would be affected by this), we will have to amend your return. I won't charge for the amendment and it should be fairly easy, its just a matter of logistics and getting through everyone. Obviously during tax season is not an ideal time for me to amend, so I will likely dedicate a small amount of time each day to doing a few until I get through them all, which also might take a while, but I will get to everyone eventually.
At the moment, this does NOT affect any state returns.
There is a LOT of other stuff in this bill, especially regarding Marketplace insurance and child credits, but I will have deal with that later! :) That all applies to 2021.
Hang tight, be patient, and watch this blog for news!