Delaware Unemployment

Good Morning,

Our Delaware governor just signed saying our Unemployment  is waived from the state income tax. So many have already filed before he did this. Will we have to amend our taxes? Some people are owing hundreds to the State for 2020 taxes.

Thank you for any info

GloriaL
Expert Alumni

State tax filing

Yes, you are correct this new legislation was just passed into law in the state of Delaware, however you will still need to pay taxes on that income for your federal tax return.

 

Since you have already submitted your 2020 tax return electronically, you will have to wait until your tax return was either accepted or rejected.

 

  • If your e-filed return is still pending. Wait until the return is accepted before amending
  • If your return has already been accepted. You will need to amend your tax return.
  • If rejected, just make your changes and then resubmit or mail your return.

For additional information regarding your Unemployment benefits in the state of Delaware: Delaware: State Tax Waiver on UI Benefits

 

If you determine that you need to amend your tax return: TurboTax: How do I amend my tax return

 

 

 

State tax filing

Thank you so much for your response. 

dssyme
New Member

State tax filing

Has the Delaware edition of Turbo Tax been updated to reflect the change in the law concerning the exemption of unemployment benefits or do I need to wait before e-filing?

LenaH
Employee Tax Expert

State tax filing

Yes, the Delaware state tax return has been updated.

 

Please follow these instructions to exclude unemployment from taxable income:

  1. Open your return.
  2. Click on State on the left hand side.
  3. Click Continue for your Maryland return.
  4. Go through the interview until you see the screen Any of These Delaware Adjustments? and put a check mark next to Other Exclusions.
  5. Enter your Delaware unemployment compensation in the Delaware Source box. 
  6. Click Continue.

[Edited 2/27/21 l 3:47PM ]

@dssyme 

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dssyme
New Member

State tax filing

I didn't ask about Maryland, I asked about Delaware.  Has DELAWARE been updated on Turbo Tax yet?

LenaH
Employee Tax Expert

State tax filing

Yes, the Delaware state tax return has been updated.

 

Please follow these instructions to exclude unemployment from taxable income:

  1. Open your return.
  2. Click on State on the left hand side.
  3. Click Continue for your Maryland return.
  4. Go through the interview until you see the screen Any of These Delaware Adjustments? and put a check mark next to Other Exclusions.
  5. Enter your Delaware unemployment compensation in the Delaware Source box. 
  6. Click Continue.

@dssyme 

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InTheRuff
Returning Member

State tax filing

These instructions need to be updated. (Besides the fact that you keep writing Maryland instead of Delaware in point 3.)

 

TurboTax now appears to automatically exclude unemployment benefits from Delaware taxable income. If you make the manual adjustment as described here, the exclusion will be double-counted and Delaware taxable income (and taxes) will be calculated incorrectly.