American Rescue Plan Act (ARP) and Unemployment Compensation

ARP exempts the first $10,200 of unemployment compensation from federal adjusted gross income for tax year 2020 for those taxpayers who have a federal adjusted gross income of less than $150,000.

If you already filed your federal and West Virginia return and DID NOT take the $10,200 deduction:

  • An amended West Virginia IT-140 return must be filed to claim the deduction. This is true even if you are waiting for the IRS to automatically recalculate and issue a refund based on the unemployment benefits deduction. West Virginia will not automatically deduct the amount from your already filed IT-140.
  • The 1099-G indicating the amount of unemployment compensation you received for the year must be included with your return to claim this exclusion. For electronically filed original or amended returns, enter the 1099-G information in the appropriate areas. For paper original or amended returns, the 1099-G must be attached.

If you filed your federal return and West Virginia return and you DID take the $10,200 deduction:

  • No further action is necessary, you have already received the benefit of this deduction.