Dorothy made $12,000 in wage income and $24,000 in unemployment in TY2020. Dorothy withheld taxes without regard to the unemployment exclusion because it had not passed yet, netting a large refund for her TY2020 return. She is still on unemployment for a while in TY2021, but decided not to withhold for the unemployment income because of the unemployment income exclusion. She comes in to check if withholding for the year is on track to prevent any "surprises" for the filing season. 

How much unemployment income is going to be tax-free for her TY2021 return?

Answer rating: 100% (QA)

The unemployment income tax exclusion for Tax Year 2021 is not applicable The ta... View the full answer