The Internal Revenue Service (IRS) announced it will start to automatically correct tax returns for those who filed for unemployment in 2020 and qualify for the $10,200 tax break. However, if you expect your tax return adjustment makes you eligible for a tax credit or an increase of a tax credit previously claimed, you will need to file an amended tax return to claim the credit. While the IRS will automatically make adjustments to your federal tax return if you qualify for the tax break, your state tax return will not be adjusted. The Unemployment Tax Waiver Could Save You Thousands of DollarsThis tax break could provide a tax savings of thousands of dollars depending on your tax situation. For example, if you qualify for the $10,200 tax break, you’re single and are in the 22% tax bracket, you may qualify for a tax savings of $2,244.

Source: Forbes May 14, 2021 21:08 UTC