IRS Update on Calculating Unemployment Compensation to exclude from income

IRS Guidance from March 24, 2021 shed some light on how to treat unemployment compensation -- a tax preparer should determine a taxpayer's MAGI without the inclusion of unemployment compensation. In this video, Tom walks through the updated instructions in the Schedule 1 and goes through a couple examples to help drive the point home.

Links:
IRS Guidance: https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation

Tax School blog: https://taxschool.illinois.edu/blog.html
Note: a PDF of the slides Tom used in this video can be found in the March 29 blog post at the link above.

Please note: this video is intended as reference information for tax practitioners. U of I Tax School is unable to respond to questions on tax law/regulations or specific taxpayer questions. If you are a taxpayer in need of preparation guidance, we recommend reaching out to a local tax professional.

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