Preparers await guidance on unemployment tax break
The nearly 2 million Ohioans who collected unemployment benefits in 2020 are in line for a big break on their federal taxes under the $1.9 trillion relief plan signed into law last week.
But, like much of the past year, claiming the deduction is confusing, especially for those who already have filed their 2020 tax return. Even tax preparers are waiting for clarity from the Treasury Department.
Normally, the federal government and Ohio treat unemployment benefits as taxable income, but the American Rescue Plan exempts the first $10,200 of unemployment benefits in 2020 from federal taxes. Ohio intends to follow suit, but it will require a change in state law.
The pandemic has caused massive unemployment. Ohio’s unemployment rate hit a record 16.4% last April.
The Ohio Department of Job and Family Services, which administers Ohio’s unemployment program, sent out 1.7 million 1099-G tax forms in January that show how much recipients received in unemployment benefits and how much income to declare when preparing 2020 tax returns. Some of those tax forms were based on fraudulent claims for unemployment benefits.
For now, tax experts say the best advice is to sit tight before filing a new or amended return, and the IRS said Wednesday it was extending the deadline to file 2020 returns to May 17.
Last week, the IRS said it is reviewing
Butler joins a select group of central Ohio businesses that have accepted cryptocurrency. The practice dates to at least 2014, when the nowclosed Backroom Barbershop & Salon in the Short North not only started accepting payments in cryptocurrency, but installed a Bitcoin money changer in the shop.
Even the state of Ohio briefly accepted Bitcoin for tax payments until Ohio Treasurer Robert Sprague suspended the practice.
In addition to Tesla, corporations that have announced they are accepting Bitcoin, at least for some transactions, include Microsoft, AT&T, Overstock, Whole Foods and Home Depot.
According to the financial website Fundera, about 2,300 U.S. businesses accept Bitcoin. The site identifies 25 Ohio companies that accept cryptocurrency, although some, such as Backroom Barbershop and Actual Brewing, are no longer open.
Butler started accepting cryptocurrency payments two weeks ago, but so far he hasn’t had any takers. To get Bitcoin rolling, he is offering to clean bedspreads or comforters free for the first 10 customers who pay in cryptocurrency.
For Butler, the move to cryptocurrency is the latest advancement in Dublin Cleaners, which his family founded in 1934.
“That’s how you get to be a longstanding company,” he said. “If you don’t innovate, you don’t last.” jweiker@dispatch.com @Jimweiker