Got a tax letter from NY about $12,500 unemployment that was supposed to be tax-free?

The tax break was only for 2020 benefits, not 2021. A lot of people get confused about this. If you got benefits in 2021, you still have to pay full taxes on them. The American Rescue Plan only exempted the first $10,200 for the 2020 tax year.

After trying to get through to the tax department for DAYS, I found this service called Claimyr that got me connected to a live agent in less than an hour. Talking to an agent got my situation resolved - they explained exactly what was going on with my account. It was the only way I could talk to a live agent after wasting hours on hold. Check out their explainer video here: https://youtu.be/Rdqa1gKtxuE

I got a similar letter but for $9,800 from my benefits. Called NYS tax dept and after being on hold for 2 hours they confirmed that YES the exemption was ONLY for 2020 benefits, not 2021. You might be able to set up a payment plan with them if you can't pay all at once.

You should double check all your paperwork. I got the same letter but it turned out the dept made an error. They were including some of my 2020 benefits in the 2021 tax year calculation. Had to send in copies of all my 1099-Gs to prove when I actually received the money. The NY tax system is a total mess right now.

Ok so here's the ACTUAL situation with NY unemployment and taxes: The American Rescue Plan Act passed in 2021 created a one-time exclusion allowing taxpayers to exclude up to $10,200 of unemployment compensation received in 2020 (not 2021!) from federal taxable income if their modified AGI was less than $150,000. New York State DID follow the federal treatment on this, but ONLY for 2020 benefits. A lot of people misunderstood and thought it applied to 2021 too. It didn't. Your options now: 1. Verify the dates/amounts are correct (dept does make mistakes) 2. If you truly owe, you can request a payment plan 3. Request penalty abatement if this is your first time with a tax issue 4. If you need to speak with someone directly, use claimyr.com to get through the phone lines - absolutely worth it when dealing with tax issues Don't ignore the letter whatever you do - penalties will just keep growing. And don't feel bad, literally thousands of NY residents made the exact same mistake.

typical ny unemployment, never explain anything clearly and then hit you with bills later 🤬

did u keep all ur 1099-G forms? thats what you need to check first. ny state is notorious for calculation errors

I work for a tax prep company (not giving official advice here). The $10,200 exclusion definitely only applied to 2020 benefits. However, you can request a penalty abatement due to reasonable cause if this is your first time with a compliance issue. Just call and explain you genuinely misunderstood the law - they often waive first-time penalties.

Call them IMMEDIATELY! When I got a similar letter I ignored it for 2 weeks and they added another $68 in penalties! The hold times are insane tho, I was on hold for 3.5 hours last Tuesday.

WAIT before you pay anything!!! My roommate got a similar letter that turned out to be a SCAM. Real NY tax dept letters have a specific format and reference numbers. Double check it's actually from the state!

im in the EXACT same boat! owe $762 + penalties for my 2021 benefits. sucks but we just gotta pay it. i set up a 12-month payment plan, they were actually pretty easy to work with once i finally got someone on the phone.

Everyone blaming the unemployed when the real problem is how CONFUSING they make the whole tax system on purpose!! 😤