It was reported on here https://www.cnbc.com/2021/03/23/10200-unemployment-tax-break-irs-makes-more-people-eligible.html and https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation.
I logged on today and saw the unemployment compensation is no longer contributing towards my AGI so now I qualify for the deduction. Before it was pushing me over the limit when combined with the COVID-19 401k withdrawal. I was paying over $2000 more when I logged in yesterday and another user confirmed the change was made by TurboTax today for the online edition.
This is probably the calculation for the new one which no longer counts it as AGI.
Unemployment Compensation Exclusion Worksheet – Schedule 1, Line 8
As soon as the IRS issues final instructions on how to report newly-exempt 2020 unemployment payments, TurboTax will make the necessary updates to its programs. Until those changes are made, you have two options:
1. File now and...there is no need to file an amended return (Form 1040-X) to figure the amount of unemployment compensation to exclude. The IRS will refigure your taxes using the excluded unemployment compensation amount and adjust your account accordingly. The IRS will send any refund amount directly to you.
2. File after IRS instructions are released and the programs have been updated.
From How will the third stimulus impact me?:
"We’re working hard to keep TurboTax up to date with the latest tax changes based on instructions we receive from the IRS. Check back soon to add your unemployment income and file your return."
"The IRS has made another change to the $10,200 limit on unemployment payment. It will no longer be treated as income for..."
Where do you see that?
The plain reading of the Rescue Act says that the AGI must be below $150,000 "without regard to this section.”.
In other words, the AGI is computed prior to the exclusion.
It was reported on here https://www.cnbc.com/2021/03/23/10200-unemployment-tax-break-irs-makes-more-people-eligible.html and https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation.
I logged on today and saw the unemployment compensation is no longer contributing towards my AGI so now I qualify for the deduction. Before it was pushing me over the limit when combined with the COVID-19 401k withdrawal. I was paying over $2000 more when I logged in yesterday and another user confirmed the change was made by TurboTax today for the online edition.
This is probably the calculation for the new one which no longer counts it as AGI.
Unemployment Compensation Exclusion Worksheet – Schedule 1, Line 8