New York State tax treatment of unemployment compensation
The federal American Rescue Plan Act of 2021 includes a provision that allows certain individuals to exclude up to $10,200 of unemployment compensation received in 2020 from federal gross income.
New York State personal income tax is decoupled from this federal provision and any unemployment compensation that is excluded from federal gross income must be added back when filing your New York State return. Form IT-558, New York State Adjustments due to Decoupling from the IRC, has been updated to report this add-back as adjustment code A-011.
I have not filed my 2020 New York State return yet. What do I need to do?
If you file using software, the software should already account for this update and add back the unemployment compensation excluded from federal gross income.
If you do not file using software, make sure to add back the federal unemployment compensation exclusion on Form IT-558.
I already filed my 2020 New York State return. Should I file an amended return?
If you did not add back unemployment compensation that was excluded from your federal gross income, then you must file an amended return with New York State.
If you did not exclude unemployment compensation from your federal gross income, do not file an amended return with New York State.
To view the correction to Form IT-558-I, visit:
Personal income tax up-to-date information for 2020 (Articles 22 and 30)
For more information, visit:
Tax Department response to novel coronavirus (COVID-19)
New York State tax implications of recent federal COVID relief