New York Taxes And Unemployment Benefits: What You Need To Know

NEW YORK—New York State is one of only 12 states that won't exempt the first $10,200 of unemployment benefits for taxpayers filing 2020 taxes. The federal American Rescue plan, however, means federal taxes will and some are confused what that means if they filed early.

Milynn Concepcion is a Long Island tax accountant. She explained that those who filed before the passage of the federal exemption do not need to amend their tax returns.

"The IRS is going to issue the credit. Those that filed after the announcement will get the exclusion on their taxes directly," she told Patch.

The federal exemption does not apply to anyone with a gross adjusted income over $150,000, Concepcion added.

A state senator from Queens called on Albany in March to follow the federal government's lead and waive taxes on the benefits. But on April 17, an aide to Gov. Cuomo confirmed there would be no change to the state taxation policy.

Because of the pandemic and associated tax changes, refunds that involve earned income credits and the American Opportunity Tax Credit may take longer, Concepcion advises.