How to Avoid Tax on Up to $10,200 of Unemployment Benefits

The American Rescue Plan Act of 2021 has saved the tax season for millions of Americans who received unemployment benefits in 2020. Instead of paying taxes on the full amount of unemployment benefits, the government is allowing eligible taxpayers to treat up to $10,200 of their benefits as tax-free income.

Here are some of the latest updates from the IRS to help you determine if you qualify for the unemployment exclusion and how you claim it on your tax return. This tax waiver could turn around your entire tax situation and put more money in your pockets this year.

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Source Fool.com