What is an IT 558 tax form in New york? And is it required to fill out, before a tax return can be received?

[DMarkM1 · Accepted solution]

Yes, the NY Form IT-558 is required to report any New York State addition and subtraction adjustments required to re-compute federal amounts using the rules in place prior to any changes made to the Internal Revenue Code after March 1, 2020.  

TurboTax will create and populate the form for you based on your interview answers.  The form is scheduled to be ready in TurboTax by 1/28/2021.   

[harrisonianpearc]

You saved me from a world of worry. First year filing without an accountants aid. Perfect answer and greatly appreciated.

[rerun55a]

It is now 1-29-2021 and this form is still not ready??? 

[Pride716]

It says the form was supposed to be available on 01/28/2021 but it has changed to another date. And the explanation listed for that specific form wasn't a really good explanation. I've never even heard of it. What is that form for specifically? I haven't used that form and I've been doing my own taxes for the past 13 years. Is the form required because COVID-19? Or because of people having to take out their retirement early due to COVID-19?

[LenaH]

Form IT-558 is a new form for tax year 2020, which adjusts your federal adjusted gross income. Certain items this year are being added back and subtracted from your federal adjusted gross income. It is similar to previous year Form IT-225, except that it is included items that cover the CARES act. 

I have listed a summary below of the two most common reasons of why Form IT-558 would be added to your NYS return. 

• Covid-19 related distributions from a retirement plan
  • For distributions taken from retirement plans, NY is requiring that the entire amount be added back to federal AGI, and then taxpayers will subtract out any taxable amount already included in federal AGI. 
• Adjustments for charitable contributions
  • Created as a new charitable deduction for those taking the standard deduction on their federal return of up to $300. This amount is required to be added back to income for NY purposes.

There are many other reasons that would require you to file this new NYS form. You can read more about Form IT-558 here: New York tax law update: What you need to know

@Pride716

[KCash77]

I assume a Non-Resident filing jointly with about half the income derived from one spouse in New York would not have to add back. Or am I wrong?

[LenaH]

Yes. It is possible for a non-resident to file a Form IT-558 if it is a modification of business interest that was deducted on your federal return. The amount of excess business interest deduction claimed for federal purposes over the amount of business interest deduction allowable for New York State would be on your IT-558. 

Per Instructions for Form IT-558, New York additions and subtractions that relate to intangible items of income, such as interest or ordinary dividends, are only required to the extent the property that generates the income is employed in a business, trade, profession, or occupation carried on in New York State.

For more information, please see IT-558 Instructions.

@KCash77

[fionakitten14]

Since these postings, there is a Federal Unemployment Compensation Exclusion applying to the tax on the first $10,200 of Unemployment compensation received.

However, what is the current status vis-a-vis NY State, other than a "decoupling" ? Should we wait before filing our state returns, and is TT going to reflect this ? TT just recently updated the software (for both online and desktop versions) for the UCE to take effect.

Somewhat confusing in that States generally follow suit with Federal guidance such as extensions, etc.,

Thanks for any help anyone can throw out there ..

alec

[Jordan862]

Whats the unemployment exclusion. Is that the amount I would put I recieved in UE?

[fionakitten14]

The Unemployment Compensation Exclusion (UCE) is forgiveness of  the Federal tax on the first $10,200.00 of Unemployment income received.  So if your unemployment compensation was $13,200.00, the tax on the first $10,200.00 is forgiven.   You would only pay tax on the remaining $3,200.00.  But, this only applies if your household income is under $150,000.00 .

This would be reflected in Schedule 1, Part 1, Line 8  The UCE figure will be a negative amount UP TO $10,200.00.  That's the ceiling.

Hope this helps,

alec

[MoniqueLO_]

Please see below for information on how to claim the new unemployment benefits in TurboTax.

https://ttlc.intuit.com/community/tax-topics/help/how-do-i-claim-the-new-unemployment-benefits-in-tu... 

@Jordan862

[kihata]

My husband and I moved to Nassau county (still in New York State) on November 4, 2020. He was collecting unemployment through the end of 2020. When I am doing the state return it is asking me to allocate recomputed federal AGI adjustments for form IT-558 of $10,200. I am assuming it is talking about the unemployment he collected. He collected a total of $11, 816 up until the end of 2020. I calculated based on his payment dates that $3,328 was after we moved and $8,488 was when we were still living in NYC. Does it seem right that the $8, 488 amount is what I put in the NYC Resident portion, and $10,200 is what goes in Total New York adjustments? That would be on form IT-558. I can't think of what else could possibly go there.

[DanielV01]

@kihata  That looks like accurate reporting.  If 8488 represents the amount of the unemployment received while still a NYC resident, then that would be reported as the NYC Resident Portion of the 10,200 (also a correct figure) that must be added back, because New York has not (at least not yet) conformed to the unemployment deduction provided to the Federal Return by ARPA.

[Phinchliff91]

Looking for clarification regarding line a-011. Turbo tax is prompting me to fill in the info, which I am yet to see clear instruction on what to do. I collected 24,438 in ui benefits. Would I subtract 10,200 from that and include the result as my answer?