Rhode Island issues tax tips on unemployment insurance benefits
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Tuesday, August 3, 2021

Rhode Island issues tax tips on unemployment insurance benefits

By Payroll and Entitlements Editorial Staff

The Rhode Island Division of Taxation has issued tax tips on the personal income tax treatment of unemployment benefits. Under federal law enacted earlier this year, up to $10,200 in unemployment benefits for certain taxpayers is excluded from the taxpayer’s income for federal tax purposes for the 2020 tax year. However, for Rhode Island tax purposes, all unemployment benefits are counted as income.

Taxpayers who have already filed their Rhode Island personal income tax return for 2020 and included 2020 unemployment benefits as income on that return do need not take any further steps. Taxpayers who have already filed their Rhode Island personal income tax return for 2020 and did not include their 2020 unemployment benefits as income must file an amended Rhode Island personal income tax return for 2020 and include in their income (“add back” to income) the amount of their 2020 unemployment benefits. Taxpayers who have not yet filed their Rhode Island personal income tax return for 2020 should include their 2020 unemployment benefits as income for Rhode Island tax purposes, regardless of how those benefits are treated for federal tax purposes.

ADV 2021-28, Rhode Island Division of Taxation, July 21, 2021.

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