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New York State Tax Treatment of Unemployment Compensation

The American Rescue Plan Act of 2021 enacted by Congress allows certain individuals to exclude up to $10,200 of unemployment compensation on their 2020 federal personal tax returns.  New York State recently issued guidance indicating that the state is decoupled from this federal law, and therefore any unemployment compensation that is excluded from federal gross income must be added back when filing your 2020 New York State personal tax returns.

If you already filed your 2020 New York State return, and unemployment compensation that was excluded from your federal gross income was not added back for NYS purposes, then you must file an amended return with New York State. If you did not exclude unemployment compensation from your federal gross income, do not file an amended return with New York State.

For more information on NYS guidance and tax implications of recent federal COVID relief visit:

https://www.tax.ny.gov/pit/cares-act-faq.htm#expanded-content-menu10

Teal, Becker & Chiaramonte Certified Public Accountants