# 26 U.S.C. § 85: Unemployment compensation

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s85>. Cite pinpoints as 26 U.S.C. § 85(a)(1).

## § 85(a) General rule

In the case of an individual, gross income includes unemployment compensation.

## § 85(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.

## § 85(c) Special rule for 2020

**§ 85(c)(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.

**§ 85(c)(2) Application.** For purposes of paragraph (1), the adjusted gross income of the taxpayer shall be determined—

**§ 85(c)(2)(A)** after application of sections 86, 135, 137, 219, 221, 222, and 469, and

**§ 85(c)(2)(B)** without regard to this section.

## Regulations

- [Treas. Reg. § 1.85-1](/26/reg/1.85-1.md): Unemployment compensation. (interprets § 85)

## Leading cases

- [Martin v. Commissioner, 90 T.C. 1078 (1988)](https://www.courtlistener.com/opinion/4706710/martin-v-commissioner/)
- [Wolfe v. Commissioner, T.C. Memo. 1992-267](https://www.courtlistener.com/opinion/4814362/wolfe-v-commissioner/)
- [Hunt v. Commissioner, T.C. Memo. 1990-335](https://www.courtlistener.com/opinion/4816386/hunt-v-commissioner/)

## Connections

Cites: none

Cited by: § 35 Health insurance costs of eligible individuals; § 36B Refundable credit for coverage under a qualified health plan; § 3402 Income tax collected at source; § 6050B Returns relating to unemployment compensation

## Amendments

- 1978-11-06: [Pub. L. 95-600](/26/act/95-600.md), 92 Stat. 2777
- 1981-08-13: [Pub. L. 97-34](/26/act/97-34.md), 95 Stat. 188
- 1982-09-03: [Pub. L. 97-248](/26/act/97-248.md), 96 Stat. 706
- 1983-04-20: [Pub. L. 98-21](/26/act/98-21.md), 97 Stat. 84
- 1986-10-22: [Pub. L. 99-514](/26/act/99-514.md), 100 Stat. 2109
- 2009-02-17: [Pub. L. 111-5](/26/act/111-5.md), 123 Stat. 317
- 2014-12-19: [Pub. L. 113-295](/26/act/113-295.md), 128 Stat. 4039
- 2021-03-11: [Pub. L. 117-2](/26/act/117-2.md), 135 Stat. 122