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Update on American Rescue Plan & Unemployment Benefits

| March 25, 2021

Illinois Department of Revenue released guidance on the American Rescue Plan Act of 2021 retroactive provision making the first $10,200 per taxpayer of 2020 unemployment benefits non-taxable for individuals with an Adjusted Gross Income of less than $150,000.

Taxpayers will not be required to add back the nontaxed portion.

If you have already filed, IDOR is looking at ways to systematically adjust the returns. Taxpayers should not file an amended return at this time.

In addition, the IRS has changed the guidance previously issued last week on the new exclusion of up to $10,200 per individual of unemployment deduction when calculating the $150,000 of Adjusted Gross Income.

If you have already filed, as in the same case as IL, no need to file an amended return. The IRS will recalculate the tax adjusted for the unemployment deduction.

This change is just one of the many challenges we have had in helping our clients file returns.

For those of you who qualify for the third round of Economic Impact Payments, the next batch is being issued this week. The payment may come in several forms including, direct deposit, paper check or a prepaid debit card. For information on when your payment and how it will be sent, visit:

As always, we thank you for your patience and understanding.