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janicepiteira
Level 1

My husband received unemployment in MD. They passed the Maryland Relief Act which makes the state tax that was paid refundable. How to we subtract it from state taxes?

When will they update the system
1 Best answer

Accepted Solutions
LenaH
Employee Tax Expert

My husband received unemployment in MD. They passed the Maryland Relief Act which makes the state tax that was paid refundable. How to we subtract it from state taxes?

The forms must first be revised by the State of Maryland. Once that is done, TurboTax will then update the Maryland state return in the program. Since the forms have not been released from the State of Maryland, the instructions to complete this in TurboTax are not known at the time.

 

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 $150,000. 

 

For more information, please see the Relief Act Tax Alert

 

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12 Replies
LenaH
Employee Tax Expert

My husband received unemployment in MD. They passed the Maryland Relief Act which makes the state tax that was paid refundable. How to we subtract it from state taxes?

The forms must first be revised by the State of Maryland. Once that is done, TurboTax will then update the Maryland state return in the program. Since the forms have not been released from the State of Maryland, the instructions to complete this in TurboTax are not known at the time.

 

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 $150,000. 

 

For more information, please see the Relief Act Tax Alert

 

View solution in original post

janicepiteira
Level 1

My husband received unemployment in MD. They passed the Maryland Relief Act which makes the state tax that was paid refundable. How to we subtract it from state taxes?

Thank you! So I will keep waiting.  Yes, my husband and I file jointly, combined we made less than $100k.  So it will still apply for us.  I will keep waiting for the updated forms then. Thank you for the information. 

janicepiteira
Level 1

My husband received unemployment in MD. They passed the Maryland Relief Act which makes the state tax that was paid refundable. How to we subtract it from state taxes?

Is there a time line for when State of Maryland will revise the forms and give the instructions to turbo tax? Do we think it will be done prior to deadline to file taxes? 

SamS1
Expert Alumni

My husband received unemployment in MD. They passed the Maryland Relief Act which makes the state tax that was paid refundable. How to we subtract it from state taxes?

If there is a spot on the Maryland return to add an adjustment to income, you manually could enter the amount of the unemployment to reduce your state taxable income amount.  Otherwise might have to wait for the form to be update.

crousemomof2
New Member

My husband received unemployment in MD. They passed the Maryland Relief Act which makes the state tax that was paid refundable. How to we subtract it from state taxes?

Hi Lena,

It's been a month since the the reply to the question about turbo tax updating the forms for the MD unemployment  and now we have an exemption for Federal income from unemployment.  Do you know if turbo tax has been updated to reflect these changes?

Thanks,

ThomasM125
Employee Tax Expert

My husband received unemployment in MD. They passed the Maryland Relief Act which makes the state tax that was paid refundable. How to we subtract it from state taxes?

The way the Maryland tax return works is they pick up the federal taxable income as the starting point to calculate Maryland taxable income. Since the federal taxable income in TurboTax has the unemployment income subtracted from it, the state return may need no additional modification. 

 

So it is available now to exclude unemployment income from taxation, provided your income is less than $75,000 single filer or $100,000 joint filer, and your unemployment compensation is not more than $10,200.

 

[Edited 4/2/21 at 4:23 PM PST]

@crousemomof2

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Weiling07
Level 2

My husband received unemployment in MD. They passed the Maryland Relief Act which makes the state tax that was paid refundable. How to we subtract it from state taxes?

Does this mean if someone received unemployment compensation less than $10200 and the income limitations were meet, they can use turbotax to file their return now? No need to wait for the MD 502LU form? As the whole amount of unemployment compensation will be deducted on the federal side and nothing left for MD to pick up. Is this correct? 

ThomasM125
Employee Tax Expert

My husband received unemployment in MD. They passed the Maryland Relief Act which makes the state tax that was paid refundable. How to we subtract it from state taxes?

@Weiling07 Yes, basically. While the federal law only excludes benefits up to $10,200, the Maryland law excludes all unemployment benefits from taxation. Since your federal adjusted gross income will exclude up to $10,200 of unemployment benefits from taxation, and your federal adjusted gross income is the starting point for Maryland income, if your unemployment benefits are not more than $10,200, you will get the correct exclusion on your Maryland return automatically.

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newuser1979
New Member

My husband received unemployment in MD. They passed the Maryland Relief Act which makes the state tax that was paid refundable. How to we subtract it from state taxes?

Good afternoon.  Say that I received unemployment compensation that was a little over 10200, i.e., 10500, and the income limitations were met because my income was less than 75000.   Is it safe to  file my MD state taxes via TurboTax?  Is the 502LU tax form incorporated in TurboTax tax software?  I went over the 502LU form with the tax payer representative with the Comptroller of Maryland and I only would have to fill out question 4.  Is this deduction automatically calculated in  TurboTax? 

Irene2805
Employee Tax Expert

My husband received unemployment in MD. They passed the Maryland Relief Act which makes the state tax that was paid refundable. How to we subtract it from state taxes?

The MD Form 502LU has not yet been incorporated in TurboTax tax software.  MD just released the form and instructions and now TurboTax must incorporate it in the program.

 

 If you haven’t filed your return, you can:  

  • File your federal return now and wait to file your MD return until TurboTax has made the changes in the MD return;
  • Wait and file both federal and MD returns.
  • File your return now and perhaps amend later when the changes are made.

 

@newuser1979

newuser1979
New Member

My husband received unemployment in MD. They passed the Maryland Relief Act which makes the state tax that was paid refundable. How to we subtract it from state taxes?

Thanks for the information.  Do you know how long it would take for TurboTax tax software to incorporate the MD 502LU form?  I am using TurboTax Deluxe software.  If I am charged to file my federal taxes, will I also be charged to file my MD state taxes at a later time?

DaveF1006
Employee Tax Expert

My husband received unemployment in MD. They passed the Maryland Relief Act which makes the state tax that was paid refundable. How to we subtract it from state taxes?

At this time, Turbo Tax is working hard to update this as well as the other states. Keep checking back for further updates. 

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