Tax Tip for Real Estate Professionals – New Coronavirus Stimulus Bill Includes an Extension of Additional Unemployment Compensation and Exclusion from Income

As a result of the ongoing COVID-19 pandemic, millions of Americans have filed claims for unemployment benefits in 2020 and 2021. Recently, Congress passed the American Rescue Plan Act, a $1.9 trillion rescue package that provides important tax-related relief to unemployed taxpayers.

The new law extends two COVID-19 related unemployment insurance programs:

Brenda Fitch Real Estate Professional
Brenda Fitch Real Estate Professional
  1. the Pandemic Unemployment Assistance program for self-employed individuals (Realtors, Brokers, and Real Estate Professionals), independent contractors (Realtors, Brokers, and Real Estate Professionals), gig workers, and part-time employees who generally do not qualify for state-level unemployment assistance, and
  2. the Federal Pandemic Unemployment Compensation program. The result of these extensions is that unemployed individuals will receive, or will continue receiving, $300 per week of unemployment insurance payments. These payments, which were scheduled to expire on March 14, 2021, will continue until September 6, 2021, and are in addition to any state unemployment benefits for which an individual may qualify.

In addition, if you received unemployment compensation in 2020, the American Rescue Plan Act provides a limited exclusion from income for some of that unemployment compensation. Generally, unemployment income is taxable. However, under the new law, up to $10,200 (or $20,400 in the case of a joint return where each spouse receives unemployment compensation) of unemployment compensation received in 2020 may be excludible from income. This exclusion applies only to the extent your adjusted gross income is less than $150,000. The adjusted gross income threshold applies to each individual in determining how much of that individual’s unemployment compensation is excludible from income.

Please contact the office of Don Fitch Accountancy at (760)567-3110 or Email if you have any questions or would like additional information.

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This blog post is intended to serve solely as an aid in continuing tax education for Don Fitch Accountancy blog, podcast, and/or email members. Due to the constantly changing nature of the subject of the materials, this product is not appropriate to serve as the sole resource for any federal tax, accounting opinion, tax return position, and must be supplemented for such purposes with other current authoritative materials. The information in this blog post has been carefully compiled from sources believed to be reliable, but its accuracy is not guaranteed. In addition, Don Fitch Accountancy is not engaged in rendering legal or other professional services and will not be held liable for any actions or suits based on this blog post, podcast, and/or email, or comments made during the above presentation. If legal advice or other expert assistance is required, seek the services of a competent professional.

(Updated 03/12/2021 08:05)

Published by Don Fitch, CPA

Offers in Compromise, Wage Levy Releases, Installment Agreements, IRS Audits, and much more IRS assistance. Also, allow us to Help you complete your Tax Returns from 1913 to present (100+ Years) and for any of the 50 States.

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