Unemployment compensation is reported on Schedule 1. Credits, deductions, and income reported on schedules 1–3 are not covered in TurboTax Free Edition.
Because unemployment is not included in TurboTax Free Edition, the program is prompting you to upgrade to TurboTax Deluxe. TurboTax Deluxe includes the 1040 form with itemized deductions (Schedules 1–6, Schedule A and Schedule C income), along with everything in Free Edition and PLUS.
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