Are you referring to the handling on the MA return Schedule Y and not the federal return?
From the MA Department of Revenue site:
As a result of a recent state law change, taxpayers with household income not more than 200% of the federal poverty level may deduct up to $10,200 of unemployment benefits from their taxable income on their 2020 and 2021 tax returns for each eligible individual.
Federal law allows a deduction of up to $10,200 if the taxpayer’s federal adjusted gross income is less than $150,000.
Since the Massachusetts income threshold is different from the federal income threshold, some taxpayers may be eligible for a deduction on their federal tax return but not on their Massachusetts tax return.
See chart below for income limits based on 200% of the federal poverty level.
# Persons in the Family/Household 200% of the Federal Poverty Level
1 $25,520
2 $34, 480
3 $43,440
4 $52,400
5 $61,360
6 $70,320
7 $79,280
8 $88,240
If I have not filed my 2020 income tax return, how can I claim the new unemployment deduction?
If you have not filed a 2020 tax return yet, you should report all of your unemployment income on your Massachusetts return as usual using line 8a on Form 1 (for resident taxpayers) or line 10a on Form NR/PY (for nonresidents or part-year residents).
If you are eligible for a deduction, you should report the deduction amount on Schedule Y, line 9.
Note that you may be eligible for a deduction on your federal return but not eligible for a deduction on your Massachusetts return.
More information about how to calculate household income and the deduction amount will be added to this page soon. Please check back.
MA Department of Revenue regarding fed unemploy exempt
