The department will make the correction and in most cases affected taxpayers will receive refunds or have a lower tax burden
The Treasury Department announced Friday that it will adjust tax returns for Oregon taxpayers who have already filed their 2020 tax returns and receive reasonable exemption from income taxes paid on recently exempted unemployment benefits in 2020.
According to an Oregon Treasury Department press release, Oregon taxpayers who became unemployed in 2020 and have not yet filed their tax returns can now do so according to instructions from the IRS.
The US bailout plan, which went into effect on March 11, exempts up to $ 10,200 per person in unemployment benefit from taxes through 2020 for households with a modified adjusted gross income of less than $ 150,000.
The change affects thousands of Oregon taxpayers who already filed their income tax returns and paid 2020 unemployment benefit taxes before Congress made the change in tax law.
Last week’s announcement means these taxpayers will not have to take any action to amend their tax returns. The department will correct this for them and in most cases affected taxpayers will receive refunds or have a lower tax burden.
The department is still working on the details of how to handle the fixes but expects to start adjusting returns this week.
More information will be available in the coming days via the Department’s American Rescue Plan FAQ.
Most e-file software vendors have notified the Treasury Department that they will have the necessary software updates.
Taxpayers who have not yet submitted any documents should check with their tax advisor or software provider. More information on electronic filing can be found on the Agency’s website.
The deadline for filing and paying income tax returns for 2020 has been extended to May 17, 2021 by both the IRS and the DOR.
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