topic Unemployment tax exemption update in Deductions & credits

Unemployment tax exemption update

Goonie84 — Fri, 19 Mar 2021 16:20:28 GMT

I received an email saying the TurboTax software would update today to be able to claim the unemployment deduction credit from the new relief bill. However, when I signed in to review, nothing was updated. Any status on this?

Re: Unemployment tax exemption update

macuser_22 — Fri, 19 Mar 2021 16:26:52 GMT

"Today" has a long time to go - until midnight.

Re: Unemployment tax exemption update

devdude1962a — Wed, 24 Mar 2021 13:53:19 GMT

Its now 3/24 I have received no update to the software. I guess its time to talk to someone live to find out what the deal is.

Re: Unemployment tax exemption update

macuser_22 — Wed, 24 Mar 2021 14:39:36 GMT

The normal scheduled desktop update day is Thursday after noon pacific time - that is 3/25. The last update was Thursday 3/18 but that was to late to include this change since it takes a week to recompile and test 8 difference Windows and Mac versions.

Re: Unemployment tax exemption update

leslienagy — Wed, 24 Mar 2021 14:51:22 GMT

Hello,

I had taxes taken out of my unemployment automatically. I have not filed my taxes yet through Turbo Tax, and there appears no way to claim or record it. How do I get the taxes paid back for exempt first $10,200 of unemployment? Will they update the software automatically and how will I know they have done this?

Re: Unemployment tax exemption update

macuser_22 — Wed, 24 Mar 2021 14:59:05 GMT

Federal tax withheld should be in box 4 on the 1099-G and that will go on the 1040 form line 25b to be applied against your total tax or add to your refund.

Re: Unemployment tax exemption update

leslienagy — Wed, 24 Mar 2021 23:45:17 GMT

Thank you for responding. So, when I entered the amount from box 4 the Federal Tax Due box at the top of the screne did not change and reflect the amount I should be getting back. Are we still just waiting for the software to be put in place and then it will show the refund? Turbotax does not have a line 25b like there would be if I were filing with pencil and paper.

Re: Unemployment tax exemption update

macuser_22 — Wed, 24 Mar 2021 23:52:04 GMT

@leslienagy wrote:

Thank you for responding. So, when I entered the amount from box 4 the Federal Tax Due box at the top of the screne did not change and reflect the amount I should be getting back. Are we still just waiting for the software to be put in place and then it will show the refund? Turbotax does not have a line 25b like there would be if I were filing with pencil and paper.

If course is does. Line 25b is on the 1040 form that is your tax return.

If you are using the desktop version then switch to the forms mode and view the 1040 form.

If using online then see this link:

https://ttlc.intuit.com/community/accessing/help/how-do-i-preview-my-turbotax-online-return-before-filing/01/26160?search-action-id=145437713842&search-result-uid=26160

Re: Unemployment tax exemption update

leslienagy — Thu, 25 Mar 2021 22:47:39 GMT

Hi again,

Thank you for the follow up and instructions. I was able to generate that paperwork. So, I had taxes taken out of my unemployment already. Will I be getting back the taxes from the first $10,200 from the government and if so, how will that happen.? Are we still waiting for turbotax to update the software to handle this automatically? Previously someone wrote that it would be updated today, but it does not appear to reflect the new rules as of yet . . .

Re: Unemployment tax exemption update

devdude1962a — Sun, 28 Mar 2021 15:49:04 GMT

The update did in fact go through and there was a change to my tax. I am however preparing another return for a friend. He had 3,754 in Unemployment and his wife had 34,000. Turbo tax is allowing 10,200 to come off the total Unemployment compensation number. I would think 10,200 would come off the 37K and the 3,754 would be wiped out. What could the issue be that is disallowing the 2nd 10,200?

Re: Unemployment tax exemption update

macuser_22 — Sun, 28 Mar 2021 15:58:50 GMT

@devdude1962a wrote:

The update did in fact go through and there was a change to my tax. I am however preparing another return for a friend. He had 3,754 in Unemployment and his wife had 34,000. Turbo tax is allowing 10,200 to come off the total Unemployment compensation number. I would think 10,200 would come off the 37K and the 3,754 would be wiped out. What could the issue be that is disallowing the 2nd 10,200?

Sounds like both 1099-G's were entered for the same spouse.

Re: Unemployment tax exemption update

leslienagy — Tue, 30 Mar 2021 14:32:35 GMT

Hello,

Just to let you know that my taxes were finally updated to reflect the unemployment adjustment. Thank you for your support over the past few days with this!

Re: Unemployment tax exemption update

leslienagy — Wed, 07 Apr 2021 13:55:28 GMT

Hello,

Any idea if Massachusetts State Taxes for unemployment will be adjusted as well or is it just Federal?

Re: Unemployment tax exemption update

JohnW152 — Wed, 07 Apr 2021 14:16:56 GMT

According to the Massachusetts Department of Revenue's Tax Filing Season Frequently Asked Questions page, they'll most likely adjust your tax return, and no amended return will be needed:

Do not file an amended 2020 return before you hear from us. DOR will send a communication to all taxpayers who previously filed a 2020 income tax return reporting unemployment income and will adjust tax returns automatically for most taxpayers who meet the criteria for the unemployment deduction.

Re: Unemployment tax exemption update

leslienagy — Wed, 07 Apr 2021 14:30:09 GMT

Thank you for the response. I have not filed my return yet. Will turbotax be implementing the software for the state as it did for the federal ?

Re: Unemployment tax exemption update

ToddL99 — Wed, 07 Apr 2021 14:42:20 GMT

Yes, TurboTax will update its state tax programs to reflect late changes in state tax law, such as extended filing deadlines and exempting unemployment compensation from state tax.

TurboTax will make these changes as quickly as possible.

After state legislatures update/change their tax laws, we have to wait for the states to publish those changes, update their own state tax processing software and tell us how those changes should be implemented in our software.

Re: Unemployment tax exemption update

leslienagy — Wed, 07 Apr 2021 22:55:32 GMT

Thank you for the detailed response and sharing this information. I will just keep refreshing and wait for the updates to be implemented. I appreciate your responding to me as well!