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How the coronavirus pandemic could affect tax returns this year

The pandemic could cause problems at tax time this year, so keep these tips in mind when filing.

NORFOLK, Va. — Tax refunds are crucial for a lot of us. We use that money to catch up on bills, pay down debt or just boost savings.

But the coronavirus pandemic could cause some problems at tax time this year. Here are some things to keep in mind:

  • If you collected unemployment benefits and withheld them from taxes, you’ll owe money to the IRS. You will file this with the Form 1099-G, and it’ll likely mean lower refunds for certain people this year. However, Virginians will receive a break, because the Commonwealth does not tax unemployment at the state level.
  • Stimulus checks will not be taxed, but you still need to report that you received that money when filing.
  • Don’t forget about your Earned Income Tax Credit! While unemployment isn’t considered earned income, it does affect how your EITC is calculated. The good news: Congress passed legislation that allows filers to use their 2019 income to determine their EITC this year.

The IRS will start accepting returns on February 12 -- that’s two weeks later than usual -- but you still have to file by the standard April 15 deadline.