The passage of the covid relief bill calls to exempt $10,200 of federal pandemic unemployment from taxation. How do I apply this to my 2021 taxes?

Forum|Forum|5 years ago
March 11, 2021
3 replies
51 views

I had to claim pandemic unemployment income on my 2021 income tax form. I have not filed yet and I want to know how to remove $10,200 from taxation.

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Best answer by xmasbaby0

TurboTax will update the software for the unemployment but there is no timeline yet.

It can take weeks to several months or more for the changes to be made to tax software. First the IRS has to change its forms. The tax software has to be changed; the IRS has to test and approve of the software. Do not expect changes in the software to happen quickly. TurboTax may have more information in the near future AFTER the bill is signed into law, and some more details emerge about how Congress and the IRS will implement the changes.

xmasbaby0

Answer

Level 15

TurboTax will update the software for the unemployment but there is no timeline yet.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

widow124

Level 2

can it be applied to the 2020 tax return? if not ready yet, should I file for extension?

JotikaT2

Alumni - Expert

While we are in 2021, the tax returns currently being prepared are for the 2020 Income Tax Returns.

The unemployment provisions were enacted for the 2020 income tax returns.

According to the newly passed legislation, the first $10,200 on unemployment earned in 2020 would be considered nontaxable if your household income is less than $150,000.

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Once the IRS issues some guidance, TurboTax will be able to update their software accordingly.

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