Tax Filing Update: Nontaxable Unemployment Benefits

Illinois Department of Revenue sent this bulletin at 03/17/2021 01:06 PM CDT

Illinois Individual Income Tax Filing Season Update - March 17, 2021

American Rescue Plan Act of 2021 - Nontaxable Unemployment Benefits

The Illinois Department of Revenue (IDOR) is currently reviewing the federally enacted American Rescue Plan Act of 2021, that includes a retroactive provision making the first $10,200 per taxpayer of 2020 unemployment benefits nontaxable for individuals with an Adjusted Gross Income of less than $150,000.

IDOR strongly urges taxpayers who fall in this category to not file returns related to these changes at this time. Additionally, taxpayers who received unemployment benefits last year and have already filed their 2020 tax return should not file an amended return at this time.

IDOR will issue guidance for taxpayers and tax professionals on how to correctly report unemployment income on their 2020 tax return once our review is complete.

For additional information, please review the IRS article: New Exclusion of up to $10,200 of Unemployment Compensation.

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