# § 85. Unemployment compensation
**(a)** **General rule** In the case of an individual, gross income includes unemployment compensation.
**(b)** **Unemployment compensation defined** For purposes of this section, the term “unemployment compensation” means any amount received under a law of the United States or of a State which is in the nature of unemployment compensation.
**(c)** **Special rule for 2020**
**(1)** **In general** In the case of any taxable year beginning in 2020, if the adjusted gross income of the taxpayer for such taxable year is less than $150,000, the gross income of such taxpayer shall not include so much of the unemployment compensation received by such taxpayer (or, in the case of a joint return, received by each spouse) as does not exceed $10,200.
**(2)** **Application** For purposes of paragraph (1), the adjusted gross income of the taxpayer shall be determined—
**(A)** after application of sections 86, 135, 137, 219, 221, 222, and 469, and
**(B)** without regard to this section.
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**Source Credit**: (Added Pub. L. 95–600, title I, § 112(a), Nov. 6, 1978, 92 Stat. 2777; amended Pub. L. 97–34, title I, § 103(c)(1), Aug. 13, 1981, 95 Stat. 188; Pub. L. 97–248, title VI, § 611(a), Sept. 3, 1982, 96 Stat. 706; Pub. L. 98–21, title I, §§ 121(f)(1), 122(c)(2), Apr. 20, 1983, 97 Stat. 84, 87; Pub. L. 99–514, title I, § 121, Oct. 22, 1986, 100 Stat. 2109; Pub. L. 111–5, div. B, title I, § 1007(a), Feb. 17, 2009, 123 Stat. 317; Pub. L. 113–295, div. A, title II, § 221(a)(15), Dec. 19, 2014, 128 Stat. 4039; Pub. L. 117–2, title IX, § 9042(a), Mar. 11, 2021, 135 Stat. 122.)
## Editorial Notes
### Amendments
2021—Subsec. (c). added subsec. (c).
2014—Subsec. (c). struck out subsec. (c). Text read as follows: “In the case of any taxable year beginning in 2009, gross income shall not include so much of the unemployment compensation received by an individual as does not exceed $2,400.”
2009—Subsec. (c). added subsec. (c).
1986—Subsec. (a). substituted “General rule” for “In general” in heading and amended text generally. Prior to amendment, text read as follows: “If the sum for the taxable year of the adjusted gross income of the taxpayer (determined without regard to this section, section 86 and section 221) and the unemployment compensation exceeds the base amount, gross income for the taxable year includes unemployment compensation in an amount equal to the lesser of—
“(1) one-half of the amount of the excess of such sum over the base amount, or
“(2) the amount of the unemployment compensation.”
Subsecs. (b), (c). , in amending section generally, redesignated former subsec. (c) as (b) and struck out former subsec. (b), “Base amount defined”, which read as follows: “For purposes of this section, the term ‘base amount’ means—
“(1) except as provided in paragraphs (2) and (3), $12,000,
“(2) $18,000, in the case of a joint return under section 6013, or
“(3) zero, in the case of a taxpayer who—
“(A) is married at the close of the taxable year (within the meaning of section 143) but does not file a joint return for such year, and
“(B) does not live apart from his spouse at all times during the taxable year.”
1983—Subsec. (a). , struck out “, section 105(d),” after “section 86”.
, inserted “section 86,” after “this section,”.
1982—Subsec. (b)(1). , substituted “$12,000” for “$20,000”.
Subsec. (b)(2). , substituted “$18,000” for “$25,000”.
1981—Subsec. (a). substituted “this section, section 105(d), and section 221” for “this section and without regard to section 105(d)” in parenthetical provision preceding par. (1).
## Statutory Notes and Related Subsidiaries
### Effective Date of 2021 Amendment
Amendment by applicable to taxable years beginning after , see , set out as a note under .
### Effective Date of 2014 Amendment
Amendment by effective , subject to a savings provision, see , set out as a note under .
### Effective Date of 2009 Amendment
> “The amendment made by this section [amending this section] shall apply to taxable years beginning after
>
> .”
, , , provided that:
### Effective Date of 1986 Amendment
Amendment by applicable to amounts received after , in taxable years ending after such date, see , set out as a note under .
### Effective Date of 1983 Amendment
Amendment by applicable to benefits received after , in taxable years ending after such date, except for any portion of a lump-sum payment of social security benefits received after , if the generally applicable payment date for such portion was before , see , set out as an Effective Date note under .
Amendment by applicable to taxable years beginning after , except that if an individual’s annuity starting date was deferred under as in effect on the day before , such deferral shall end on the first day of such individual’s first taxable year beginning after , see , set out as a note under .
### Effective Date of 1982 Amendment
> **“(1)** **Compensation paid after 1981.—** The amendments made by this section [amending this section] shall apply to payments of unemployment compensation made after December 31, 1981, in taxable years ending after such date.
>
> **“(2)** **No addition to tax for underpayment of estimated tax attributable to application of amendments to compensation paid in 1982.—** No addition to tax shall be made under section 6654 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] with respect to any underpayment to the extent such underpayment is attributable to unemployment compensation which is received during 1982 and which (but for the amendments made by subsection (a)) would not be includable in gross income.
>
> **“(3)** **Special rule for fiscal year taxpayers.—** In the case of a taxable year (other than a calendar year) which includes January 1, 1982—
>
> **“(A)** the amendments made by this section shall be applied by taking into account the entire amount of unemployment compensation received during such taxable year, but
>
> **“(B)** the increase in gross income for such taxable year as a result of such amendments shall not exceed the amount of unemployment compensation paid after December 31, 1981.
>
> **“(4)** **Unemployment compensation defined.—** For purposes of this subsection, the term ‘unemployment compensation’ has the meaning given to such term by section 85(c) [now 85(b)] of the Internal Revenue Code of 1986.”
, , , as amended by , , , provided that:
### Effective Date of 1981 Amendment
Amendment by applicable to taxable years beginning after , see , set out as a note under .
### Effective Date
> “The amendments made by this section [enacting this section and
>
> ] shall apply to payments of unemployment compensation made after
>
> , in taxable years ending after such date, except that such amendments shall not apply to payments made for weeks of unemployment ending before
>
> .”
, , , as amended by , , , provided that:
### Waiver of Statute of Limitations
> “If credit or refund of any overpayment of tax resulting from the amendment made by subsection (a) [amending
>
> , set out as an Effective Date note above] is barred on the date of the enactment of this Act [
>
> ] or at any time during the 1-year period beginning on the date of the enactment of this Act by the operation of any law or rule of law (including res judicata), refund or credit of such overpayment (to the extent attributable to the amendment made by subsection (a)) may, nevertheless, be made or allowed if claim therefor is filed before the close of such 1-year period.”
, , , provided that: