When the President signs the new Covid Bill it will forgive the first $10,200 of unemployment. Will TurboTax automatically update my return if I haven't filed yet?

Forum|Forum|5 years ago
March 11, 2021
25 replies
96 views

I am claimed as a dependent on my parent's taxes. I file single. I collected $10,700 in unemployment and currently I am going to be taxed on the whole amount. Will the new law, allowing the first $10,200 to be "forgiven" automatically be reflected in TurboTax?

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Best answer by JohnB5677

If you are a dependent and filed your return, do not do anything yet.

The IRS will issue guidance about what to do if you already filed. Making part of your unemployment tax-free would increase your refund or reduce your tax. Wait until the IRS has issued the instructions before you do anything.

You will not get a new 1099-G. The 1099-G reports the full amount of unemployment benefits that were paid to you, whether or not it is all taxable. The 1099-G does not show how much of it is taxable or not taxable. Any adjustment of the taxable amount will be made on your federal tax return, or on an amended federal tax return, or by the IRS.

JohnB5677Answer

Level 15

If you are a dependent and filed your return, do not do anything yet.

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t-492

Level 2

So, if you haven't filed yet, will Turbo Tax update the new amount minus $10,200?

It's still not reflecting it on filing screen.

I think that's what a lot of people are wondering.

DoninGA

Level 15

@t-492 wrote:

So, if you haven't filed yet, will Turbo Tax update the new amount minus $10,200?

It's still not reflecting it on filing screen.

I think that's what a lot of people are wondering.

After the legislation has passed Congress and after the President has signed the legislation and after the IRS has written the rules, regulations and procedures. And after the IRS has changed any forms or schedules to accept the tax code changes. And after the IRS has approved the changes in the TurboTax program that apply to the tax code changes, then it will be available for the users of the tax preparation software.

This can take anywhere from several weeks to several months before it becomes available.

See this TurboTax support FAQ for information on the American Rescue Plan - https://ttlc.intuit.com/community/tax-topics/help/how-will-the-stimulus-package-impact-me/00/1393859