March 25th ***UPDATE**** This was brought to my attention!
While this will exclude the unemployment from the AGI, the Rescue Act specified 8 other tax and credit calculations that depend on the AGI were NOT to be affected by the Act.
In other words, simply entering this way can make 8 other calculations inaccurate. That is why it must be done in the software so those other calculations will use the AGI without regard to the change of the Unemployment Compensation Exclusion.
(The IRS worksheet was for paper returns and entering the change in a piece of paper will not change other calculations, but entering as misc income will change anything that depends on the AGI.)
The following 8 areas are NOT to exclude the Unemployment Income from the AGI and therefore, the below direct input instructions into the TT software is NOT advised:
Social Security
Savings Bonds
Adoption
Retirement Savings
Interest Education Loans
Tuition Expenses
Passive Activity Losses & credit limits
Certain State Returns
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Original Message:
Unemployment benefits received are reported on line 7 of Schedule 1 and when Turbo Tax provides the update, the Unemployment exclusion is reported as a negative on line 8 of Schedule 1.....provided you meet the requirements for the exclusion.
