Will NYS waive taxes on unemployment income?

[vsimone1950]

Does the omission/exclusion of up to $10,200 in unemployment income apply to New York State income tax??

[AmyC]

NY begins with the federal AGI. Once your federal is reduced, your NY will automatically be reduced as well unless NY decides to change their laws and add it back in.

[vsimone1950]

I'm fully aware of that, however , my question was Is New York State exempting the first $10,200 of 2020 unemployment benefits?? Is NYS following the Federal lead on this issue?? Help!!

[LenaH · Accepted solution]

Each state agency, including New York, will have to provide guidance before taxpayers that collected unemployment can gain the full economic benefits of American Rescue Plan Act of 2021. Currently, no guidance on this has been provided by New York State as of today (3/13/21). 

@vsimone1950

[vsimone1950]

Thank You Lena H- best answer yet> I concur!!

[vsimone1950 · Accepted solution]

Just received an e-mail response from NYS Dept. of Taxation dated 3/17/20@2:36pm relating to the unemployment income exclusion.   "We are still awaiting guidance on how the New York State Taxation Department will treat this income. Please continue to check the website for updates."

What's the delay NYS?? You are holding up the filing process!!!

[ChipM6]

According to Taxslayer as of 3/24/21New York is "currently decoupled" see following

Welcome to NY one of the highest tax state in the US 

3/24/21 - New York State is currently decoupled from the federal American Rescue Plan Act of 2021. This Act excludes from federal gross income a portion of the unemployment compensation received in tax year 2020 for taxpayers with adjusted gross income (AGI) of less than $150,000. At this time New York State remains decoupled from the unemployment compensation income exclusion and an adjustment to income for New York is required.  The Unemployment Compensation Exclusion Addback should be included on Form IT-558 New York State Adjustments due to Decoupling from the IRC and has been designated as A-011.

[LinaJ2020]

As of today, TurboTax program has not been updated for New York.  Select Click on New York

Per state, due to decoupling from the federal American Rescue Plan Act of 2021, the Unemployment Compensation Exclusion Addback should be included on Form IT-558 New York State Adjustments.  

[trailrider]

It seems as of April 1, 2021, TURBO TAX program has updated the NYS return to be ready IF NYS does decide to allow the 10,200 Unemployment Comp Exclusion.   Careful to notice that Line 19a adds back the exclusion that the Fed (IRS) allows.

[ChipM6]

As of 3/29 albany news10  Mikhaela Singleton reported the exclusion was in committee and an interview with Senator James  Tedisco whom is sponsoring a bipartisian bill to follow the federal rule.  The New York fiscal budget is in process of being concluded for 2021, it maybe part of that but I have no further information

[gjp]

It appears that TurboTax  has updated the web site and shows that NY State is now updated . I previously filed my federal taxes (with the allowed deduction), awaiting for NY State to update. After  logging in today and looking for a new update to my taxes, NY State is still the same without any changes to my refund. Any ideas why my refund  hasn't changed?

[ChipM6]

After reviewing Turbo Tax New York Form IT-558, Turbo Tax has updated the form to flow to Page 2 Line 16 of IT-201 and math works correctly to Page 2 Line 19 however Line 19A correctly reflects the federal reconciliation of adjusted gross income as NYS unemployment exclusion IS NOT LAW yet.  This means state income taxes have not changed and Line 19A is the correct amount of NYS income before Additions and Subtractions on IT -201Page 2 Line 19A.  Turbo Tax appears to be in position to make the change reflecting the unemployment exclusion once our state officials finish the budget (hopefully). My source is conversations today with aids to my senate and assembly officials that both say that unemployment is under negotiation as part of the budget process that maybe approved any day.

[gjp]

Fine, I can wait, but the website should not have stated the the updated is complete when it’s still in negotiations.

[Japs52]

How can turbo tax say my state is ready to file, when NYS hasn’t decided yet about the 10,200 tax exclusion. Just got a turbo tax alert saying my state was ready to file. No it’s not. Amount owed hasn’t changed since waiting on the exemption.  It hasn’t even been approved yet in NYS.  Anyone in NY shouldn’t file state yet

[ErnieS0]

@Japs52 Your New York income tax return is ready to file because it matches current law. Right now, there is no $10,200 unemployment exclusion for NY income taxes. All unemployment is taxable to NY and any federal exclusion for unemployment is added back on your NY return.

You are welcome to wait. There is a current bill (S5125A) to match the federal unemployment exemption. It's currently in a Senate Committee. It may never become law. The NY filing deadline was extended to May 17. You can also file for a six-month extension until October 15, 2021.

How to request your extension

• You can complete your request for free using our online service.
• You must e-file your extension if you prepare your extension using software that supports e-file.
• If your paid preparer is required to e-file your tax return, and is also preparing your extension request, the preparer must e-file your extension request.

The online and e-file options provide you with a confirmation that we received your extension request.