Unemployed New Yorkers May Be Owed Money
There are nearly 20 million people living in New York state and nearly 1/4 of us received unemployment and enhanced pandemic unemployment benefits since this whole thing started last year. So that is nearly 5 million people collecting a smaller amount of money than their job paid and they have to pay tax on this money. Or do they?
According to News10 ABC, if you received unemployment benefits in 2020 and filed your taxes before the American Rescue Plan became law, you paid taxes on a portion of income that you didn't have to. The IRS is working to get that money to most that qualify.
Yes, most that qualify. Let's say you collected unemployment in 2020. You filed your taxes before the American Rescue Plan became law. You over paid taxes to the government and are owed a refund. Problem is that you owe the IRS back taxes. The IRS will apply these "refunds" toward back taxes rather than deposit them into your account.
Either way, if you are a couple filing jointly and earned less than $150,000 you don't have to pay taxes on the first $20,400 of unemployment benefits. If you filed as an individual you don't have to pay taxes on the first $10,200. Apparently individuals will be processed first followed by married filing jointly.
You don't have to do anything to receive this money. The IRS will be handling the process themselves and say that there will be automatic refunds coming this spring and summer. As far as state taxes are concerned, officials are debating whether those funds should remain taxable or not.
I'd like to think that the majority of New Yorkers that find themselves unemployed would much rather have a job with health insurance and some security. For now, even a small refund would be helpful.