Louisiana Tax Implications of $10,200 Unemployment Compensation Exclusion
The federal American Rescue Plan, signed into law on March 11, 2021, excludes from gross income the first $10,200 of unemployment benefits received in 2020 by taxpayers with incomes less than $150,000. The tax relief extends to individuals who received benefits through state unemployment insurance programs, including any increased benefits from the federal CARES Act and other federal relief legislation. For state tax purposes, the first $10,200 of unemployment benefits will not be included in the calculation of adjusted gross income for Louisiana income tax.
For married couples filing jointly, the exclusion applies to the first $10,200 received by each spouse.
Louisiana taxpayers who have not yet filed their 2020 state income taxes should follow the instructions on the resident or non-resident state income tax return, depending on their residency status. Those who have filed their state taxes already will need to file an amended state return to reduce their Louisiana adjusted gross income by the appropriate amount.
Questions about the content of this Alert should be directed to LCPA State Government Relations Director Linda Babin.