A3. Yes. You should exclude up to $10,200 of your unemployment compensation in 2020 if your modified AGI is less than
$150,000. If you're married, your spouse generally reports their unemployment compensation on their Form 1040-NR
and excludes up to $10,200 of unemployment compensation paid to your spouse on that return if their modified AGI is
less than $150,000. You can't exclude any of your spouse's unemployment compensation that's not reported on your tax
return, even if you claim your spouse as a dependent.
Q4. I'm married and live in a community property state. Am I eligible for the exclusion? (updated July 7, 2021)
A4. Yes. Because you live in a community property state, if you file a Married Filing Separately return, you report half of
your unemployment compensation and half of your spouse's unemployment compensation on your tax return and your
spouse reports the other half of your unemployment compensation and half of his or her unemployment compensation
on his or her tax return. You should exclude up to $10,200 on your tax return if your modified AGI is less than $150,000.
Your spouse should exclude up to another $10,200 on his or her tax return if your spouse's modified AGI is less than
$150,000. Neither of you should exclude more than the amount of unemployment compensation you report on your
Schedule 1, Line 7.
If you file a Married Filing Jointly return, when completing the Unemployment Compensation Exclusion Worksheet –
Schedule 1, Line 8, you should report half of your unemployment compensation and half of your spouse's
unemployment compensation on line 8 of the worksheet and your spouse reports the other half of your unemployment
compensation and half of his or her unemployment compensation on line 9 of the worksheet. Do not enter more than
$10,200 on either line 8 or line 9 of the worksheet. If your joint modified AGI is less than $150,000, you and your spouse
can exclude up to $10,200 each. Do not exclude more than the amount of unemployment compensation you report on
your Schedule 1, Line 7.
If you already filed your return and entered a smaller exclusion amount on Schedule 1, line 8 than you are entitled to,
see
Do I need to file an amended return if I live in a community property state and did not enter the correct exclusion
amount on Schedule 1, line 8?
Q5. Am I eligible for the exclusion if I live in American Samoa, the Commonwealth of the Northern Mariana Islands,
Guam, Puerto Rico, or the U.S. Virgin Islands? (added June 25, 2021)
A5. Residents of U.S. territories (American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, the
Commonwealth of Puerto Rico, and the U.S. Virgin Islands) who receive unemployment compensation payments that
are otherwise subject to U.S. income tax, may be eligible to exclude up to $10,200 per person of unemployment
compensation from U.S. income tax for 2020.
Eligible residents must have modified adjusted income of less than $150,000 to exclude up to $10,200 of unemployment
compensation from their 2020 federal income tax return. In the case of taxpayers that are married filing jointly, the
maximum exclusion would be $10,200 for each spouse for a maximum of $20,400. You may not exclude more than the
amount of unemployment compensation you (and your spouse if filing jointly) actually received.
U.S. territory residents with questions relating to the taxation of COVID-related unemployment compensation by the
territory should contact their territory tax department. More information is also available in News Release IR-2021-
81, IRS reminds U.S. territory residents about U.S. income tax rules relating to pandemic unemployment compensation.
Q6. I was unemployed in 2020, but payment of my unemployment compensation was delayed until 2021. Do I qualify
for the unemployment compensation exclusion? (added March 23, 2022)