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Get your taxes done using TurboTax
not sure what you meant. Looking at my TT and returns, they did just that -- updated the software to do exactly the right thing. You do NOT subtract the 10,200 directly from your UE, so on line 7 (1040) the full amount of UE is supposed to be reported, and then in Schedule 1, line 8, that's where you report the UCE. The software updated the worksheet to include an Unemployment worksheet that feeds to Sch 1 line 8. That negative "Other Income" would also flow to your state return (but it depends on what your state does with it -- in California, that is balanced out since UE is not taxable at all in CA). So this is exactly what the IRS instructed to do: report the full amount of Unemployment benefits on line 7, then add the negative UCE to Other Income. The software has been updated accordingly to do just that.