State of Maryland just passed a new relief act 2021which repeals all state and local income taxes on unemployment benefits. Does Turbotax has implemented it?

[tonywl73]

i mean im still getting this error message when i revisit my maryland taxes since they have been rejected twice ...

What needs to be done:

This issue will be resolved in an upcoming product release scheduled for April 29, 2021. Update your software on or after 04/29/2021 (for web products this will happen automatically), run a final review of your state return, make the appropriate change and re-submit this return electronically.

[rchadd]

I have been using turbo tax for 15 years, this is my last year.  They told me April 20th that it would be done in a week, everytime I call I get a different answer.  MD extended the deadline until July but I don't want to wait to file especially since MD already updated all their information over 30 days ago.  

[Eagles1991]

The 502 lu was already updated 2 weeks ago and I submitted my taxes to state of Maryland and federal and automatically updated for me and been accepted and waiting on it to be approved 

[tonywl73]

any updates on this???

I worked in de, live in maryland. Weeks ago it looked like turbotax had their crap fixed so I filed. Fed accepted, De accepted, MD rejected for software issues.....seemed to be fixed again a couple weeks ago so filed md again, rejected...it went from me getting about 200 back to owing almost 700. I am holding on for hope since the deadline was pushed back but I dont understand. In 2020 i worked three months....had maryland taxes taken out of my paycheck as well as delaware.....then went on unemployment in april. With De unemployment no state tax were taken out only federal but then Both DE and MD passed the legislation saying they werent taxing unemployment but here I sit still.....with maryland still saying rejected and no update and claiming i owe 686 and DE went from owing to getting 200 back and it didnt change no issues with DE but nothing with MD....so somehow do I owe MD? doesnt seem like I should since I didnt pay taxes to md or de with unemployment and then with DE they got their forms implemented and i got a small refund, but maryland still has me owing quite a bit....im at the end of my rope here

[Cynthiad66]

Did they state what the issue was for rejecting the Maryland return?  If so, I suggest correcting the issue and filing again.

[tonywl73]

Yes due to TurboTax and their software, I posted the exact error message like three replies ago.. Then turbo told me on the phone they have no idea what’s going on or when it will be fixed 

[DMarkM1]

@TonywI73

As you mention in a post earlier a TurboTax rep said you may owe the tax.  Here is why. 

Only 10,200 of unemployment benefits are excluded from your MD return.  Any MD unemployment benefits over the 10,200 could be excluded from MD AGI if you met the income requirements.  Since your unemployment was from DE and no MD taxes were withheld there would be taxes due on that excess unemployment.  If you have any other income it also is part of MD income and if there was no MD withholding you will owe tax on that amount. 

Here is a link for reference.  See page 3 and footnote 2. 

You should print your MD return and see the income and taxable income and tax and amount withheld on the forms.  You will likely need to mail in your return.  

Also, here is the instruction booklet for MD returns.  You can see what each line means and at the end you will find the tax table to confirm the MD tax.   

[tonywl73]

thank you for replying!

My question....I am not understand this. I get what you are saying about the 10200...BUT maryland passed the relief act that exempted unemployment from being taxed. Wouldnt that include all of the unemployment, not just the first 10200?

[DMarkM1]

No, they exclude the 10,200 because it was excluded from federal adjusted gross income.  However, the remainder is taxable unless it was MD unemployment and you meet the income requirements.  Yours was DE unemployment so the excess is not excluded from MD tax. Reference the page and footnote I sent earlier.

[tonywl73]

Thanks again for the replies

I understand now, and OUCH. hopefully I can do a payment plan oy