LOUISVILLE, Ky. — The IRS will start accepting and processing 2020 tax returns on Friday, Feb. 12, 2021. From unemployment insurance to stimulus checks, there are questions some may have about what taxes they will owe.
What You Need To Know
- After a year like no other, Kentuckians may have questions about the 2021 tax season
- Unemployment income is taxable; anyone who did not choose to withhold taxes from each unemployment check will likely owe this year
- Stimulus checks are not taxable, and if you never received your stimulus check it will be applied as a tax credit
- If you worked from home for most of 2020, home office expenses are not deductable if you were a W2 employee
“The stimulus itself will not be taxed. If you didn’t receive the stimulus you will actually receive a credit for that on your 2020 tax return,” said Eiden, who is an enrolled agent licensed by the IRS.
She further explained that means people who didn’t receive the maximum amount of the stimulus check, but are eligible for any remaining amount, would see that as a credit on their tax return.
Eiden also explained that people who didn’t receive a stimulus check at all may also still receive that credit.
“The stimulus was based on the 2018 or the 2019 tax return. So if [in] 2020 their income was lower than it had been, they may still qualify for some of that credit,” Eiden explained.
Eiden also said that any unemployment insurance given out by the state or federal government is taxed.
“Anyone who has filed unemployment, they should’ve seen a box on there that says withhold taxes or don’t withhold taxes, and they can withhold taxes at both the federal and the state level. So, sadly, those who have been on unemployment for most of the year, and they didn’t check those boxes, they are probably going to owe,” Eiden said. “You know, they are going to owe some taxes on that, and they’re probably going to have a balance due.”
With so many people working at home because of the pandemic, many may wonder if they can claim home office expenses. The short answer is no, for employees.
“If this was pre-Tax Cuts and Jobs Act, yes, but the Tax Cuts and Jobs Act that came in 2017, and we started that in 2018, did away with all employee expenses. So, no. Really, anybody who is working from home this year that is a W-2 employee will not have the benefit of being able to take their home office expenses,” Eiden said. “If they are a sole proprietor, or a 1099 contractor, or they own their own business, they can definitely take advantage of that home office deduction on their business tax return.”
Eiden said if your company offers reimbursement for home office expenses, you should take advantage of that.
“Because the employer can still write that off on their taxes, but the employees cannot,” Eiden told Spectrum News 1.
The IRS’s website also states “most earned income tax credit or advanced child tax credit related refunds should be available in taxpayer bank accounts or on debit cards by the first week of March, if they choose direct deposit and there are no other issues with their tax return.”
In addition, the IRS says the quickest way to get a refund is to file taxes electronically and use direct deposit.
Lastly, the IRS’s website lists these important filing season dates:
- Friday, February 12 - IRS begins 2021 tax season. Individual tax returns start being accepted and processing begins.
- Thursday, April 15 - Due date for filing 2020 tax returns or requesting extension of time to file.
- Thursday, April 15 - Due date for paying 2020 tax owed to avoid owing interest and penalties.
- Friday, October 15 - Due date to file for those requesting an extension on their 2020 tax returns.