Covid-19 Unemployment $10,200 update

[EA12]

When will the new law, allowing the first $10,200 to be "forgiven" automatically be reflected in TurboTax?  Is there a date for that update to be released.

[DoninGA]

After the legislation has passed Congress and after the President has signed the legislation and after the IRS has written the rules, regulations and procedures.  And after the IRS has changed any forms or schedules to accept the tax code changes.  And after the IRS has approved the changes in the TurboTax program that apply to the tax code changes, then it will be available for the users of the tax preparation software.

This can take anywhere from several weeks to several months before it becomes available.

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

[EA12]

Will TurboTax keep customers updated as the new forms are approved by the IRS.  A slow update creates a delay in Covid relief payments.

[JoannaB2]

The American Rescue Plan enacted on March 11, 2021 excludes from income up to $10,200 of unemployment compensation paid to you in 2020 if your household AGI is $150,000 or less. Click here, to get the latest information

[Hal_Al]

The IRS has issued instructions, so TT does know what to do. So, far we haven't heard when. There do not appear to be any form changes needed. 

Any workaround involves some risk of error  That said, if you really can't wait, this work arounds appears to put it in the right place, with the right wording:

 In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in  Home & Business)

Wages & Income

Scroll down to:

-Less Common Income

      -Misc Income, 1099-A, 1099-C

       - On the next screen, choose – Other reportable income  

       - On the next screen, click yes

       - On the next screen, you'll get blanks to enter the amount and a description. For the amount enter with a minus sign:  -10200. For description type UCE(10200). It will go on line 8 of Schedule 1 as a deduction (-).

This assumes you meet the income restrictions and you’re entitled to the full $10,200 and your spouse doesn’t also have unemployment.   See the worksheet at:  https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemploym... for how to calculate the correct amount to enter.

I’ve heard that the American Rescue Plan Act specifically says that the excluded unemployment income is NOT to be subtracted in calculating the following:

• Taxable Social Security
• Savings bond interest exclusion for education
• Employer-provided adoption benefits
• Deductible IRA contributions
• Student Loan Interest Deduction
• Tuition and Fees Deduction
• Passive activity loss limitation for rental real estate

If you're not sure that you are not affected by any of those, you should not use the workaround. 

[EA12]

Thank you.

I am happy to wait for the TT update.  The first response I received to my original inquiry said it could be 2 weeks to 2 months to solve the tax change on TT.

From your response it sounds like... since the IRS has provided instructions.... TT is working on an update now.

Hopefully the fix will happen this week.

[EA12]

Any update on the update 

projected release date ?

[DoninGA]

---

@EA12 wrote:

Any update on the update 

projected release date ?

---

See this TurboTax support FAQ for information for the unemployment compensation exclusion - https://ttlc.intuit.com/community/tax-topics/help/how-do-i-claim-the-new-unemployment-benefits-in-tu...

Also see this IRS statement - https://www.irs.gov/newsroom/irs-statement-american-rescue-plan-act-of-2021

[Roni CPA]

I am amazed (not really)at the lack of communication from TT regarding the update.  Lacerte updated Thursday the 18th and after an hour of searching, I find nothing but promises from TT.  

I am assuming there will be somthing similiar to Lacerte in TT where a box is checked to apply the new tax laws?  Anyone have any info on that?

Thanks

[EA12]

The lack of information from TT on this update is incredibly disappointing.  There should be daily updates for a timeline to the update on the front page off TT’s site.  

H&R Block updated their program this morning!

[Reba12340]

I just switched and did mine w H&R Block. I was holding on to my stimulus in case I had to pay taxes on my unemployment which is one reason why I was so anxious to get them done. You can even import your taxes from last year to make it easier. If you don’t want to keep waiting I would use them instead. 

[ThomasM125]

@EA12 As of March 19, 2021 the update to allow you to exclude some or all of your unemployment benefits from taxation on your federal tax return is functional in the online version of TurboTax.

[EA12]

Ok but what if you already bought the CD/DVD version and need the update.  When will the update be released.  Taxes are completed but not filed ... waiting for update.

[DawnC]

The updates have not been completed yet for all of TurboTax federal and state products.    You can sign up here to receive an email notification when the changes have been fully implemented into TurboTax.  We are ensuring that the $10,200 of unemployment income gets excluded from taxable income using the IRS's accepted method.   Although you can go in and manually exclude the income without waiting for the update, we recommend waiting for the update to prevent long delays in processing and possibly having to file an amended return later.   This is the top priority for our engineers; they are working hard to get this implemented across all platforms as I type....   @EA12

[Roni CPA]

So what I am hearing is that TT has no idea when the desktop version will be updated. Just that they are "working on it".  From a company that is the self-proclaimed leader in tax software, I find that very unacceptable.  Of course I know I can work around it and/or I can wait. 

Doesn't make it acceptable.  IMHO