topic Unemployment income exemption Stimulus in Get your taxes done using TurboTax

Unemployment income exemption Stimulus

Njdre80 — Sat, 06 Mar 2021 18:09:35 GMT

Under the new stimulus bill that is due to come out, they approved the exemption of taxable unemployment benefit income for $10,200.

I have my taxes completed but not filed because I have been waiting for this legislation. When/How will Turbotax handle this? Or will the state provide an amended 1099 form?

Re: Unemployment income exemption Stimulus

DoninGA — Sat, 06 Mar 2021 18:39:52 GMT

Nothing has passed Congress so there has been no changes to the tax code.

The legislation only would affect a federal tax return. The various states that tax unemployment compensation would have to make changes to their own tax codes and only if they so desire.

TurboTax nor any other tax preparation software company can do anything until After the IRS has written the rules and regulations after passage of legislation which changes the tax code.

Re: Unemployment income exemption Stimulus

Njdre80 — Sat, 06 Mar 2021 20:58:09 GMT

You clearly didn't understand my question. I KNOW nothing can be done NOW, as the tax laws haven't changed. That is why I said I am waiting to file until this legislation goes into law. My question is AT THAT TIME what happens? Does the turbo tax software algorithm get updated instantly to reflect the unemployment income exemption? Or perhaps does the state issue a different 1099 for the unemployment income. I'd like to file asap and get it over with and pay what I owe but I know this legislation will lessen what I owe.

Re: Unemployment income exemption Stimulus

DoninGA — Sat, 06 Mar 2021 22:02:09 GMT

@Njdre80 wrote:

You clearly didn't understand my question. I KNOW nothing can be done NOW, as the tax laws haven't changed. That is why I said I am waiting to file until this legislation goes into law. My question is AT THAT TIME what happens? Does the turbo tax software algorithm get updated instantly to reflect the unemployment income exemption? Or perhaps does the state issue a different 1099 for the unemployment income. I'd like to file asap and get it over with and pay what I owe but I know this legislation will lessen what I owe.

Once the legislation passes nothing changes instantly for any tax preparation software. TurboTax cannot change anything in their software until the IRS issues the rules and regulations which can take weeks or months. Then the IRS must approve any type of changes that is needed to comply with the new regulations. Then and only then would the software changes be released to the public.

Re: Unemployment income exemption Stimulus

cuznskunk3 — Sun, 07 Mar 2021 14:34:38 GMT

I already have filed my taxes. Looks like in the future I will now need to amend them on the first 10,200 untaxable unemployment income. I understand it has to become law and the implications after that. Will Turbotax email us and let us know when this becomes available as an option? Will it be free of charge? Thank You.

Re: Unemployment income exemption Stimulus

AlanHarrison — Mon, 08 Mar 2021 07:49:18 GMT

I think I understand your question. The state will likely not issue a new 1099 because the information will not be any different. The same amount of gross money minus whatever deductions you may have opted for with the state occurs. The difference will come when the IRS writes the code and Turbotax implements it. As the other fellow said, that could take weeks - there's no deadline. I'm hoping that TurboTax sends a notice, but who knows? It's causing a lot of us to wait until the last minute. I'd rather file for an extension than file an amended return, but I understand your feelings. I At least there will be some temporary relief for those of us dealing with closed industries when it's all said and done.

Re: Unemployment income exemption Stimulus

joepsca — Mon, 08 Mar 2021 18:12:17 GMT

Actually, state tax for CA will also adjust as the $10,200 federal deduction for unemployment affects AGI. So now that it is virtually certain that the bill will be signed by Biden, when will/how will Turbo tax make the adjustments and what will be the options for users?

Re: Unemployment income exemption Stimulus

KathrynG3 — Mon, 08 Mar 2021 19:57:13 GMT

Until the IRS issues official guidance, it is not our position to speculate.

For the most recent updates at TurboTax, check: American Rescue Plan: What Does it Mean for You and a Third Stimulus Check | The TurboTax Blog

@joepsca

Re: Unemployment income exemption Stimulus

valsvet — Tue, 09 Mar 2021 03:21:59 GMT

I am sure Turbo Tax will include $10,200 exemption in one of their updates as soon as IRS passes the new guidance to them. I am pretty sure this will not take months as someone here speculated. Why? This ruling is straightforward. It does not exclude any group of people, has no special situations attached. Could be just one sentence - "exclude first $10,200 from taxation of unemployment compensation" . No way something that simple would take weeks or months. I have my taxes ready to file but will wait till Intuit updates the software.

Re: Unemployment income exemption Stimulus

DawnC — Tue, 09 Mar 2021 03:33:19 GMT

The bill has not been signed into law yet, but once it is, TurboTax will be updated to reflect the changes in tax law. And it won't take months 😉 @valsvet

Re: Unemployment income exemption Stimulus

jennylamon03 — Thu, 11 Mar 2021 23:38:41 GMT

It has been nearly a month since Governor Hogan signed the bill to make MD unemployment non-taxable and nothing has changed in TurboTax. It seems likely that MANY people will need to file for an extension or file an amended return. Why is there such a delay in updating this within the software? If it has been nearly a month for MD, isn't it likely that it could take that long, or longer to make the changes for federal, meaning it is unlikely to be done in time for timely tax return filings?

Re: Unemployment income exemption Stimulus

AlanHarrison — Thu, 11 Mar 2021 23:52:26 GMT

The delay is about federal taxes, not state taxes. So unless you want to file state taxes without filing federal taxes first (not recommended), you'll want to wait until Turbotax updates its program to include that. The federal bill was just signed this morning 3/11, so give it some time.

Re: Unemployment income exemption Stimulus

CJB86 — Thu, 11 Mar 2021 23:59:42 GMT

Thank you for your response. I did not think that it would take turbo tax weeks to months to update either and I appreciate your clarification.

Re: Unemployment income exemption Stimulus

gloriah5200 — Fri, 12 Mar 2021 00:00:22 GMT

POTUS signed the American Rescue Plan today.

Some of the changes are for 2021 tax year, but some may be retroactive.

Unfortunately, now that it is law, the IRS has to get busy and put it into the IRC tax code. Once they get it into the tax code, then they will let the public know what has to be done to get the benefits.

The IRS will provide guidance on how you can claim these additional benefits as soon as they are able.

For more information, please refer to the following link on the new stimulus package:

How will the new stimulus package impact me

Re: Unemployment income exemption Stimulus

Stingwcw1999 — Fri, 12 Mar 2021 03:07:47 GMT

will I still get stimulus

Re: Unemployment income exemption Stimulus

ErnieS0 — Fri, 12 Mar 2021 04:11:15 GMT

@jdre80 Once new legislation is passed into law and the IRS provides us with guidance on how we need to provide them with the necessary information, we will work quickly to update TurboTax.

The IRS, and most states, consider unemployment payments as taxable income. This means that you have to pay tax on unemployment payments and report them on your return. With this new law, if your household income is less than $150,000, the first $10,200 of unemployment will be tax-free, but any amount you receive above that will be taxed.

@Stingwcw1999 Payment files will go out this weekend and the bank account effective date will be Wednesday, 3/17/2021. The IRS is expected to release further information on Friday, 3/12/2021.

You don’t need to do anything to get your stimulus check. The IRS will determine eligibility based on your last tax return (either 2019 or 2020) and will likely send your payment to the bank account where your tax refund was deposited. If you haven’t filed your 2020 return yet, you can do that now to give your most recent information to the IRS, including bank account or address information, to help ensure your stimulus check goes to the right place.

Re: Unemployment income exemption Stimulus

Marc-1 — Fri, 12 Mar 2021 15:21:33 GMT

Where's the harm in just decreasing the amount of unemployment income equal to the amount excluded by the new statute when entering the information into the program as it currently functions?

Re: Unemployment income exemption Stimulus

B Camp — Fri, 12 Mar 2021 21:21:33 GMT

So for those of us who filed before the bill was signed, will Turbotax email us with information once the software is updated in case we need to file an amended return?

Re: Unemployment income exemption Stimulus

mbk114 — Fri, 12 Mar 2021 22:16:58 GMT

I agree, particularly if the State involved (e.g., CA) doesn't tax unemployment benefits!

Re: Unemployment income exemption Stimulus

DawnC — Fri, 12 Mar 2021 22:30:05 GMT

Because we don't know yet how the IRS (and states already have changes pending) is going to handle the income. You can of course file the way you want. But considering the delays in processing that all of these changes are going to take, I personally, would not risk it. There are people that still have not received 2019 refunds. Filing too early may put your return in a status that could delay it by months. And if it gets delayed, there will be nothing you can do to speed it up. Even though you can e-file amendments this year, there were be millions, so why risk it? @Marc-1

And yes, you will receive communications from TurboTax once the changes are implemented. @B Camp