MD Amendment for Unemployment

[gower2352]

Hello if we filed before the Maryland Relief Act was passed that allows unemployment to not be taxed by the state how do we get TurboTax to help us file the amendment to exclude state tax owed on unemployment benefits? 

[LenaH]

Yes, you will be able to amend your return to reflect the RELIEF Act and get a refund of any taxes paid for your unemployment compensation if you are eligible. However, the forms must first be revised by the State of Maryland. TurboTax will then update the Maryland state return in the program. 

Per the State of Maryland on 2/16/21, the Comptroller began accepting tax year 2020 returns for processing prior to the enactment of the RELIEF Act. Due to the emergency nature of this bill, both individual and business tax forms will be created or modified to account for its provisions. 

Once the forms are updated, you will be able to amend your return. 

Also, please keep in mind that the tax free unemployment waiver only appears to apply to single filers who reported under $75,000 or joint filers who reported under $100,000. 

For more information, please see the Relief Act Tax Alert. 

[Edited 3/2/2021 l 10:21AM]

[BeckyPultz]

According to the Comptroller of Maryland's website, to get Individual Subtractions from Income (for qualifying individuals), "individuals must complete Maryland Form 502LU and file it along with their return."

[Irene2805]

If a taxpayer has already filed a MD return and it has been accepted, they must amend their MD return to get the benefit of the change.

HOWEVER, the Comptroller of MD (tax division) must first set up the rules for how the changes to the tax forms will be implemented and then will they tell the tax software companies how to change their software--both the original returns (502, 505) as well as amended RETURNS (502x, 505x).

When the changes have been implemented please see this TurboTax Help article for assistance in amending your MD return:  I need to amend my state return

[Jennpritchard8]

So is it better for me, someone who will qualify to get my taxes that I paid into MD for unemployment back, should I go ahead and file with the plan to amend later or do I wait to file after the change to the software is made?
 

[AnnetteB6]

If you are willing to wait, it is better to only need to file one time versus filing and then amending your return.  Amended returns are filed by mail and generally take weeks to process.  

You can still go ahead and file your Federal return now and then file your state return after the changes have been implemented.  

See the following TurboTax article for details:  Can I file my Federal taxes now and skip my state for later?

@Jennpritchard8

[BeckyPultz]

Personally, I am waiting.  I did my MD state taxes on TurboTax and just haven't filed them.  I am hoping that the TurboTax update will come well before April 15 and that it will do the subtraction for me. 

It seems like a pain to have to amend a filing.  Especially since Turbo Tax seems to only have amendment capacity for Federal Filing only.  I would be wrong about that.  

I believe that is a personal choice you'll have to make.  I end up owing if I don't wait.  Perhaps you end up getting money back and you need it sooner than later.  Then filing an amendment would be worthwhile.

[BeckyPultz]

Jen,

There is a Durbin provision in the Federal Covid Relief bill that will subtract unemployment income from Federal Filing (I'm sure rules apply).  

I am not holding my breath on this Federal relief bill ever reaching the President's desk.  Have you heard anything about that provision that Dick Dubin put into the bill recently?

Thanks!

[LenaH]

Per the State of Maryland, the tax free unemployment waiver only appears to apply to single filers who reported under $75,000 or joint filers who reported under $100,000. 

@BeckyPultz

[Edited 3/2/2021 l 10:21AM]

[Stellarae69]

How will I know when the changes for md state unemployment are made for an amendment 

[BeckyPultz]

I've been checking the Comptroller's website for the 502LU form and instructions.  They aren't published, yet.  I see that when I opened my TurboTax today, there was a Maryland software update.  Not sure what was on that.  Maybe TurboTax experts can weigh in on this question.

[befoundbyme]

Spoiler

IT WILL BE APPRECIATED IF SOMEONE FROM TT POSTS HERE THAT THE MD FORM 502LU HAS BEEN ADDED TO TT AND US IN MD CAN PROCEED TO DO OUR MD TAX RETURN. THANKS

[anagen1]

I had to make an account just to reply to this lol (annoying)

The threshold AGI limit for joint filers is $100,000, not $150,000. I had a client who just made over 100k cuz his wife made a lot and he was on unemployment and unfortunately, this will not apply to their return.

Also, WHERE THE **** IS THIS 502LU FORM!?!?! Why release this and not be ready!? Ridiculous!

[befoundbyme]

The threshold for a single filer is $75,000 AGI. I find this very wrong and am thoroughly disappointed in the State of MD. I, a single filer and was paid $37,400 in unemployment and was unemployed all of 2020. But, I have some financial assets that pay dividends and due to those and some capital gains my AGI for 2020 is just barely over the 75,000 threshold for a single filer. This is a real unfair process. Gov Hogan announces in several press conferences about Not taxing unemployment benefits. He makes No Mention about the threshold/caps on this tax relief for the unemployed tax payer... 

And the comptroller of MD has no clue when the 502LU will be available or the explanation for it...

[rubyshoes]

Is it 150k or 100k? I am seeing 100k?  Need to know because we're right on the line.