Best Accountants in Bethesda, MD

Are you a Maryland Resident that Received Unemployment Benefits Last Year? Under Maryland's new RELIEF Act, individuals will be exempt from state and local income taxes on unemployment benefits from 2020 and 2021 tax years. The exemption is estimated to save Maryland taxpayers more than $400 million and help people get more tax refunds during the tax season over the next two years. The same income tax exemption is available at a federal level, as well. In other words: if you received Maryland unemployment benefits, income tax exemptions could apply to you at a local, state, and national level. According to the IRS, you don't have to pay federal taxes on your employment benefits up to $10,200- as long as your adjusted gross income is less than $150,000 for joint filers ($75,000 single filer). If you are married, each spouse receiving unemployment doesn’t have to pay taxes for up to $10,200 of the compensation received. It’s important to note that you must request this exemption in your state and federal tax returns in order to receive the exemption. Unfortunately, it is not enough to simply be eligible for relief. The last year has been complicated enough- don’t hesitate to reach out to us at Mendoza&Co or a trusted tax advisor to maximize your return this tax season.