Massachusetts Unemployment compensation received during the Covid-19 pandemic

[jlrpiano]

So my situation is simpler.  My AGI is under $25,520, which is that 200% number.  And then the other income is unemployment.  Which by looking at the instructions, says...  On Schedule Y, put your unemployment income (mine was about $7k, so also under the $10,200 limit).  then put that number on the line on the main MA form, so basically, AGI+unemployment, then from Sched Y, the unemployment comes off.

The problem is, with my AGI number under $25,520, TTax is not offering me a Schedule Y, so it adds in the unemployment, and then calculates my tax based on AGI+Unemployment.

Which is why unless they fix it, I'll just file my MA by paper.

[Ben Molony]

I think you should be careful until the MA Department of Revenue issue guidance on how to calculate "household income".  Several posters have already copied the advice from the DOR website which still says instructions will be available "soon".

I think the one thing that we can be pretty sure of is that you will need to add back the Federal unemployment ("UCE") deduction to your AGI.  The text of the MA bill confirms this ("For the purpose of this subsection, “household income” shall be determined without regard to this section").

What is still unclear is whether you need to add back other items such as untaxed social security, workman's comp or even income from other members of your household who are not your dependents.

[dave_the_rave]

Just talked to Mass Dept of Revenue, they are in the process of updating Form 1 and Schedule Y to reflect the new tax law which excludes the first $10,200 of unemployment compensation for filers whose AGI is less than 200% of the federal poverty level.  The rep said "bear with us, we are working on it, should be done in a week or so".  So I think this explains why TurboTax has not been updated to automatically reflect this law change, as the relevant MA tax forms have not yet been updated.

[jlrpiano]

Thanks!  I kinda figured as much.  It is vague on the DOR website (I was just extrapolating based on other indicators), so I was just holding off a bit because hey, there's an extra month to file anyway, and extensions are always available too...

[Ben Molony]

So the MA DOR finally released a worksheet to calculate Household Income to determine if you are eligible for the MA unemployment deduction (linked from the MA DOR website here https://www.mass.gov/info-details/tax-filing-season-freque[product key removed]ions).

Household income =Federal AGI then add back: untaxed interest, untaxed social security and the Federal Unemployment Compensation Exclusion ("UCE").  Compare to the 200% Federal Poverty Limit for household size.

It's a simple calculation, so TT should be able to implement it quickly. The original poster on this thread who had $22k of AGI would only qualify for the MA deduction if the UCE was $3.5k or less.

[Wdtax20]

Thanks for the update and thanks to all who contributed their input.  Now we can finally complete our Massachusetts state tax returns.

[pmv1631a]

I already submitted my Massachusetts taxes via TurboTax. Now I get an update that added the 10200 unemployment deduction. Not sure what to do and TurboTax hasn't been any help. This is sad. 

[AmyC]

@pmv1631a  Some states are adjusting the returns while other states want an amended return. MA says officially not to file an amended return now and more information will be posted. See Tax Filing Season Frequently Asked Questions | Mass.gov

[pmv1631a]

Amy.

Thank you for your reply.

I don't have a lot of faith in the Massachusetts DOR.

Not sure they will get back to me before May 17th.

However, I do have a lot of faith in Turbotax.

Thank you for your reply. 

[AmyC]

@pmv1631a  Wait a day and things change. The form 502LU for legislative update, is now a part of the program and contains the unemployment subtraction.

If they decide you need to amend, you can. Don't do it now though, be patient for a while. Normally, an amended return should not be done until the original is settled. Let's see what the state does with your return and go from there. Good luck!

[pmv1631a]

Thanks Amy.

I sent my return in as I mentioned. Plus I did get a text message saying what I owed.

However, I now know from TurboTax that I don't owe anywhere near as much. 

I hope this can be resolved. 

Thanks again. 

[AmyC]

@pmv1631a

MA will eventually settle down and get it all figured out. Patience and waiting, good luck!