Unemployment and 2020 tax returnsUpdates related to the American Rescue Plan Act of 2021

If you received unemployment (also known as unemployment insurance), the American Rescue Plan Act of 2021 reduced your federal adjusted gross income (AGI) for 2020 tax return.

This means you may now qualify to receive more money from California tax credits, such as:

Many people do not have to do anything to receive these additional benefits.

New income calculation and unemployment

The American Rescue Plan Act of 2021 excludes a certain amount of unemployment from your federal AGI for your 2020 tax year, based on your filing status:

  • Single: You will exclude up to $10,200 from your federal AGI
  • Married filing jointly/registered domestic partners: You will exclude up to $20,400 from your federal AGI

What you need to do and payment timeframes

Your next steps depend on what you’ve done so far. To report your federal AGI and California tax credits correctly, find the scenario that applies to you.

Scenario What to do
Filed your 2020 tax return before March 11, 2021 and:
  • Claimed CalEITC
  • Reported unemployment income
You don’t need to do anything. We will make the changes for you. If you qualify for a bigger tax refund, you’ll receive it beginning August 2021.
Filed or will file your 2020 tax return after March 11, 2021 and:
  • Claimed CalEITC
  • Reported unemployment income
You don’t need to do anything. Your tax return will be processed with the updated requirements. Visit Wait times to review normal refund and return processing timeframes.
Filed your 2020 tax return and:
  • Did not claim CalEITC
  • Reported unemployment income
  • Federal AGI less than $40,201 (single) or $50,401 (married filing jointly)

See if you qualify for CalEITC. If you do:

  1. Download, print, and complete California Earned Income Tax Credit (FTB 3514). Visit CalEITC for more information.
  2. Mail this form to:
    Franchise Tax Board
    PIT Correspondence
    PO Box 942840
    Sacramento CA 94240-0040

You do not need to amend your tax return.

See if you qualify for the Golden State Stimulus

Most people that qualify for CalEITC also qualify to receive a one-time Golden State Stimulus payment. For most Californians who qualify, you don’t need to do anything to receive the stimulus payment. Visit Golden State Stimulus for more information.