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26 U.S.C. § 85 — Unemployment compensation

submitted 48 years ago by Pub. L. 95-600 to r/title-26-INTERNAL-REVENUE-CODE · 157 words · no verdicts yet

in plain englishAI-generated · not legal advice

Unemployment benefits normally count as taxable income. For the 2020 tax year only, the first $10,200 of unemployment pay was tax-free if your income was under $150,000. That special break applied separately for each spouse on a joint return.

(a) General rule: For individuals, gross income includes unemployment compensation. (b) Definition: "Unemployment compensation" means any amount received under a federal or state law that works like unemployment benefits. (c) Special rule for 2020: (1) For the 2020 tax year, if your adjusted gross income was under $150,000, you did not have to count up to $10,200 of unemployment compensation you received — and, on a joint return, up to $10,200 for each spouse — as income. (2) To figure adjusted gross income for that $150,000 test, you calculate it (A) after applying sections 86, 135, 137, 219, 221, 222, and 469, but (B) without applying this section itself.
the actual law source: uscode.house.gov ↗public domain
(a) General rule

In the case of an individual, gross income includes unemployment compensation.

(b) Unemployment compensation defined

For purposes of this section, the term “unemployment compensation” means any amount received under a law of the United States or of a State which is in the nature of unemployment compensation.

(c) Special rule for 2020
(1) In general

In the case of any taxable year beginning in 2020, if the adjusted gross income of the taxpayer for such taxable year is less than $150,000, the gross income of such taxpayer shall not include so much of the unemployment compensation received by such taxpayer (or, in the case of a joint return, received by each spouse) as does not exceed $10,200.

(2) Application

For purposes of paragraph (1), the adjusted gross income of the taxpayer shall be determined—

(A)

after application of sections 86, 135, 137, 219, 221, 222, and 469, and

(B)

without regard to this section.

Source credit: (Added Pub. L. 95–600, title I, § 112(a), Nov. 6, 1978, 92 Stat. 2777; amended Pub. L. 97–34, title I, § 103(c)(1), Aug. 13, 1981, 95 Stat. 188; Pub. L. 97–248, title VI, § 611(a), Sept. 3, 1982, 96 Stat. 706; Pub. L. 98–21, title I, §§ 121(f)(1), 122(c)(2), Apr. 20, 1983, 97 Stat. 84, 87; Pub. L. 99–514, title I, § 121, Oct. 22, 1986, 100 Stat. 2109; Pub. L. 111–5, div. B, title I, § 1007(a), Feb. 17, 2009, 123 Stat. 317; Pub. L. 113–295, div. A, title II, § 221(a)(15), Dec. 19, 2014, 128 Stat. 4039; Pub. L. 117–2, title IX, § 9042(a), Mar. 11, 2021, 135 Stat. 122.)

history & why it existsrecord from the source credit
  • 1978Enacted · Pub. L. 95-600 · 92 Stat. 2777
  • 1981Amended · Pub. L. 97-34 · 95 Stat. 188
  • 1982Amended · Pub. L. 97-248 · 96 Stat. 706
  • 1983Amended · Pub. L. 98-21 · 97 Stat. 84, 87
  • 1986Amended · Pub. L. 99-514 · 100 Stat. 2109
  • 2009Amended · Pub. L. 111-5 · 123 Stat. 317
  • 2014Amended · Pub. L. 113-295 · 128 Stat. 4039
  • 2021Amended · Pub. L. 117-2 · 135 Stat. 122

A history note hasn’t been published yet. The record shows enactment by Pub. L. 95-600 on 1978-11-06.

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