by Elizabeth Troutman
Arizona taxpayers who received unemployment benefits in 2020 and filed their state tax return before the American Rescue Plan Act (ARP) was enacted on March 11 can receive a new income tax refund.
That’s according to a Thursday announcement from the Arizona Department of Revenue.
Congress passed the ARP to give communities money to address public health and economic recovery issues which resulted from the COVID-19 pandemic.
Arizona conformed to an ARP provision which excluded up to $10,200 of unemployment benefits from federal income tax, resulting in the same $10,200 of unemployment benefits being excluded from Arizona income tax.
“The Department of Revenue seeks to provide accurate information and guidance to our taxpayers, regardless of whether they owe taxes or may be due a refund,” Rebecca Wilder, communications director of the Arizona Department of Revenue told The Center Square. “We encourage those who review our guidance and believe they may be eligible for a refund, to make the necessary filings so they can claim any money they are entitled to without delay.”
To receive the refund, taxpayers must file an amended state return after amending their 2020 federal income tax return or after the Internal Revenue Service automatically adjusts their 2020 federal income tax return. Taxpayers must provide a federal transcript of their 2020 income taxes after the IRS adjusts their federal income tax return.
Those who filed their Arizona income tax return after the enactment of ARP most likely already received the benefit of the unemployment exclusion, so should not file for a tax refund.
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Elizabeth Troutman contributes to The Center Square.
