Does the 10,400 unemployment tax credit in 2021 stimulus apply to the 2020 return?

[DoninGA]

The unemployment compensation exclusion is only for tax year 2020.  We are waiting for IRS guidance on how to proceed with this change in the tax code.

See this TurboTax support FAQ for information on the American Rescue Plan - https://ttlc.intuit.com/community/tax-topics/help/how-will-the-stimulus-package-impact-me/00/1393859

[efrydel11]

Will turbo tax automatically amend our returns? My tax expert said I had two weeks to question her but has not responded. Thanks

[LenaH]

No. Once the IRS provides additional guidance, TurboTax will be updated to reflect these new tax laws relating to unemployment. Once the program is updated, you will be able to amend your return, if required.  

If you’d like to be updated when the information becomes available, please sign up here.

@efrydel11

[efrydel11]

Will turbo tax automatically update the 2020 returns they submitted on our behalf? What is the expected turnaround time? Thanks 

[ErnieS0]

TurboTax is waiting for IRS guidance on how they will handle exempt unemployment for people how have already filed tax returns. TurboTax is not able to do anything until the IRS figures out what it wants to do.

Right now there is no turnaround time. Please sign up here for an update so TurboTax call tell you what's happening when it knows.

The IRS says, "For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance."

As part of the recently passed American Rescue Plan, the first $10,200 worth of unemployment payments are now tax-free for households with annual incomes less than $150,000. This expanded tax relief begins this year, starting for taxpayers filing returns after January 1, 2020.

[AF61]

How does the 10,200 get reflected on the 2020 return if you received more than that?

[JamesG1]

@AF61

TurboTax does not yet support the $10,200 reduction of taxable unemployment insurance on your 2020 Federal 1040 tax return.

Once the IRS provides additional guidance, TurboTax will be updated to reflect these new tax laws relating to unemployment. 

This TurboTax Help allows you to sign up for updates from TurboTax about this feature of the tax code.

[macuser_22]

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@AF61 wrote:

How does the 10,200 get reflected on the 2020 return if you received more than that?

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If you already filed then the IRS commissioner testified Thursday before Congress NOT to amend,  that the IRS will apply the credit "in house" and adjust your refund or tax accordingly.