i am trying to file my NYS IT-201 return
however, the IT-588 just automatically pop up on my return showing the federal adjustment of the recent federal unemployment exemption of $10,200. Which causing my NYS EIC credit not go thru because of IT-588 form is attached.
Please TURBOTAX team fix this issue ASAP . thanks.
This is not a TurboTax error. The unemployment exclusion on your federal return must be added back on your IT-558 form. NYS has not made a decision regarding the exclusion of unemployment nor has the state made any changes to the law. Therefore, there is no exclusion in NYS for your unemployment. If they decide to exclude a portion of unemployment in the future, you can amend your return to get the difference in state tax.
For income tax purposes, thresholds and amounts used in the EIC calculation of this credit will be based on a recomputed federal adjusted gross income (FAGI) based on these changes. This will take your adjusted gross income and add back anything that the state does not exclude for state purposes, such as unemployment.
For example - currently, the $10,200 would be added back to your federal Adjusted Gross Income (AGI) in calculation of your NYS EIC.
For more information, please see IT-215 Instructions.
Because there is a question on IT-215. If IT-588 is filed, EIC credit will be automatically not qualified even my federal recapture income will still be qualified. Which does not make sense at all. @LenaH
It is crazy we were waiting for this NYS update and yet the NYS DEPT OF TAXATION create the IT-588 to deduct the $10,200 to be added back on line 19a form IT-201. I believe there is an bill the Senate needs to pass to waive the $10,200 (Bill S5125A)
In my position I will wait I have to pay $1,112 if this bill is not approved.
As LenaH notes above, this isn't a program error.
TurboTax programming is based on current law. If the law is changed, as jcangel0721 suggests is possible, you'll be able to amend any original return you filed, if you're then eligible for New York EIC.