Section 1 Special rule for late unemployment compensation payments
In general— Section 85(c) of the Internal Revenue Code of 1986 is amended by redesignating paragraph (2) as paragraph (4) and by inserting after paragraph (1) the following new paragraphs:
“(2) Special rule for delayed 2020 unemployment compensation—In the case of any taxable year beginning in 2021, if a taxpayer is issued an unemployment compensation payment with respect to calendar year 2020 but such payment is not received by the taxpayer until 2021, the gross income of such taxpayer shall not include so much of the unemployment compensation received by such taxpayer as does not exceed $10,200.
“(3) $10,200 aggregate limitation—The total amount excluded from gross income with respect to a taxpayer under this subsection for all taxable years shall not exceed $10,200.”
Conforming amendment— Paragraph (4) of section 85(c) of the Internal Revenue Code of 1986 (as redesignated by this section) is amended by striking “paragraph (1)” and inserting “paragraphs (1) and (2)”.
Effective date— The amendment made by this section shall apply to taxable years beginning after December 31, 2020.