topic Is the unemployment compensation deduction of $10,200 used in the social security claw back calculation (worksheet 1)? in Retirement tax questions

Is the unemployment compensation deduction of $10,200 used in the social security claw back calculation (worksheet 1)?

edhackenbush — Fri, 02 Apr 2021 18:29:35 GMT

Is unemployment compensation excluded from the social security taxable income situations?

Re: Is the unemployment compensation deduction of $10,200 used in the social security claw back calculation (worksheet 1)?

Bsch4477 — Fri, 02 Apr 2021 18:47:15 GMT

Calculation of tax on social security is not affected by the unemployment deduction.

Re: Is the unemployment compensation deduction of $10,200 used in the social security claw back c...

RayW7 — Fri, 02 Apr 2021 18:49:07 GMT

No, the $10,200 does not include your taxable Social Security on Line 6b.

The $10,200 exclusion is for unemployment income, not social security. Social security is taxed differently depending on the rest of the income on the return.

For more information, see: New Exclusion of up to $10,200 of Unemployment Compensation | Internal Revenue Service

Is my Social Security income taxable?

Jobless benefits are not counted as wages under Social Security's annual earnings limit, which can reduce Social Security benefits for people who claim them before reaching full retirement age and continue to work.

-follow this link for additional information on how SS is taxed-

Are Social Security Benefits Taxable? | The TurboTax Blog

Re: Is the unemployment compensation deduction of $10,200 used in the social security claw back c...

edhackenbush — Mon, 05 Apr 2021 23:23:52 GMT

Apr 5 at 5pm MT

After the $10,200 deduction for UI benefits was implemented by TurboTax in its software last week, everything was fine except for the social security taxable benefits computation. I created my return before the update was done and when TurboTax had it modified, I pulled up my return and Schedule 1, line 8 had the deduction in it and Line 9 was correct

However, the social security taxable benefits sheet was not corrected. The amount used was the same as before (the full UI amount that did not include the $10,200 exclusion). So I talked with TurboTax for over 90 minutes and before I got hung up on, the rep I talked to agreed that it was wrong, and was going to talk to the software guys to find out if this was known or not. I don’t know what happened. I believe their software just needs to refresh the social security taxable benefits worksheet with the data from the other forms.

I also just want to comment on the “full retirement age” term. From what I know, there is no such thing in the social security world. I’m 73 and they keep clawing benefit payments back. “Full retirement age” is an IRA type issue. I would love to see the IRS definition of “full retirement age” and what it pertains to.

Re: Is the unemployment compensation deduction of $10,200 used in the social security claw back calculation (worksheet 1)?

edhackenbush — Mon, 05 Apr 2021 23:32:10 GMT

Schedule 1, line 9 includes all unemployment payments (line 7) so that is one of the numbers feeding line 3 of the social security taxable benefits worksheet.

Re: Is the unemployment compensation deduction of $10,200 used in the social security claw back c...

ColeenD3 — Tue, 06 Apr 2021 15:09:27 GMT

The fact that unemployment is excluded from income, does not automatically mean that MAGI will be changed for other purposes. Here is how the law reads:

“(1) IN GENERAL.—In the case of any taxable year beginning in 2020, if the adjusted gross income of the taxpayer for such taxable year is less than $150,000, the gross income of such taxpayer shall not include so much of the unemployment compensation received by such taxpayer (or, in the case of a joint return, received by each spouse) as does not exceed $10,200.

“(2) APPLICATION.—For purposes of paragraph (1), the adjusted gross income of the taxpayer shall be determined

“(A) after application of sections 86, 135, 137, 219, 221, 222, and 469, and

“(B) without regard to this section.”.

Social Security Benefits-Section 86