They probably will if it affects the filing of 2020 MD taxes.
BUT
The state of MD tax division (Comptroller) and staff must first set up the rules for how it will be implemented, as there are limitations on who is eligible to have the taxes exempted.....that could take a month or more...and they have to get that programmed into their own MD computers..... only then will they tell the tax software companies how it is to be implemented....then that takes another month or so to program at the software end....so my guess is June...but I'm a pessimist.....end of March if they work fast and keep it simple.
Foolishness is a legislature that makes changes to last year's taxes right in the middle of the tax season with easily thousands of MD tax returns already filed.......absolutely crazy foolish nonsense .
Heck...maybe they'll just reject all tax returns already Efiled...and shut down until they are ready to receive them after they get all the forms and rules modified.....I figure they'll have guidance on what to do by the end of the week.
The worst part is they signed the act yesterday and there is no detail out yet when and how it's going to be implemented. I hope all Marylanders don't have to wait till end of March.
Here is the information about the Maryland RELIEF Act. It is based on ones 2019 tax return and no one needs to apply. It is an automatic payment.
{Edit 9:40 AM PST}
Hi. Does anyone know how the relief in taxes paid on Maryland Unemployment will be worked out? Apparently we should get the taxes back that we paid in from what I understand? Is that correct?
Yes. You will get the taxes paid on your unemployment for 2020 if you file an amended return. This law was just recently passed, so I would wait until the State of Maryland advises on when to file an amended return before you do so. 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.
Thank you! I actually have not filed yet. Should I wait and give it time for the system on TurboTax to update and then file?
You can wait, but it will probably be a few weeks before all the necessary updates are made - both by MD and TurboTax.
MD will have update its tax return processing software (internal rules) and publish those changes before TurboTax is able to update its MD state tax interview.
Still, waiting until those changes are made is probably a better option than filing an amended return.
They are referring to the repealing of the MD State and Local Taxes on Unemployment in the 2020 year and 2021- Filling 2020 using tax preparers websites they automatically figure State Taxes as well as Federal and without an update, they will be incorrect.
Here is a link with more details to the new act 2021. I think, like many you have suggested, to wait couple of weeks to file rather than amending taxes. They should have got this signed back in Dec.
What if you filed married filing separate and made under $75,000?
As I’m understanding it we would just need to file an amended state return if we already filed before this major change took effect. I owed taxes to MD and assume this will take care of that so it’s kind of imperative they figure it out soon.
@gower2352 Yes, you need to file an amended return but when will be based on how you chose to pay..
If you said to draft it from you bank account, then that needs to happen before you file an amended return.
If you said you will mail it in, then you can do the amended but will have to correct the program and mark that nothing has been paid.
Once your return is accepted and the finances are settled bank paid or not paying, you can file an amended return.
Hi Lena,
Thank you so much for this information. Have you seen any updates as to when we should file that amendment to get this state approved relief?
Thanks so much!
NOW...it Sounds like they are going to use your 2019 MD tax filings first... for these:
Listen to all of this first:
https://www.youtube.com/watch?v=_LFG1G6K7co&feature=youtu.be
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Then go here...but may have to revisit in another week...might be too soon:
Your response reflects only one portion of the Act.
Members should refer to the following article to appreciate the full breadth of the ACT:
True...the unemployment part will only be settled by tax form changes...MD says to not expect those changes to occur before March...but they don't say WHEN in March. Even if early March, I suspect late March at the earliest for the tax software.
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"Please note that tax forms related to the RELIEF Act signed into law on February 15, 2021, will not be ready until March. "
https://www.marylandtaxes.gov/RELIEFAct/index.php
But what about percentage change on eitc from 28% To 45% rate
Once the forms are revised by the State of Maryland, TurboTax will update the Maryland state return to reflect all changes under the RELIEF Act.
Per the State of Maryland, filers claiming the federal EITC may also be eligible for a refund of a percentage of this amount through their Maryland tax return. The RELIEF Act increases this percentage from 28% for tax year 2019 to 45% for tax years 2020 through 2022, resulting in an increased refund amount for some taxpayers. Additionally, for tax years 2020 through 2022, taxpayers without qualifying children will be allowed to use the full amount of their federal EITC as a refundable credit against Maryland income tax, up to a maximum of $530.
These changes do not require any action on behalf of taxpayers or preparers and will incorporated into the revised forms and instructions pursuant to passage of the Act. Individuals who qualify for the enhanced state REIC but who have already filed need not take any action. The Comptroller will make any adjustment necessary based on the law change and will adjust the amount of the credit, including sending an additional refund if applicable.
For more information, please see the Maryland RELIEF Act Tax Alert.
So if I already did my return and owe money do I need to do an amended return for the unemployment tax relief once they update forms? Because I will probably get a refund in that case. I haven’t paid it yet as I was waiting to to amended return when forms are updated.
Yes, if MD changed their tax code and that would generate a refund for you by filing an amended return once they have all the forms and changes approved and put in place, then that is what you need to do.
However, if you do not pay your balance due by the due date of the return, then they may charge you penalties and interest on the unpaid late payment.
Generally, if you file a return and you have a balance due, the taxing authorities want you to pay the balance due from the original return before you file the amended return.
You could watch your time and see how close you get to the filing deadline and balance due payment date to see if they have things in place to file the amended before the due date of the payment. If the due date gets too close, you may have to pay the balance due and request a refund with the amended return.
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 link. The state website states that the forms will not be ready until sometime in March.
{Edited 01:22 PM PST}
@PattiF
Would like to correct some info for those who may see your reply:
The tax free unemployment waiver is for those who have a "filing status of single, married filing separate, or dependent with agi of less than $75,000, and filers with married filing joint, head of household, or surviving spouse status with a agi of less than $100,000."
Source:The actual Tax Document