$ 10,200 deduction for unemployment benefits

[497]

When will TurboTax software be updated to reflect that $ 10,200 of unemployment benefits are not taxed under the recent COVID relief tax bill?

[DoninGA · Accepted solution]

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

[Romy90210]

I spoke to  a TurboTax employee on the phone and they told me that the IRS just released the guidelines for tax software companies to follow and to expect an update of the software by mid-week as the guidelines are easy to implement. People on this forums keep spreading false news left and right. SMH 

[TC6872]

I see that the web version is now calculating the federal updates, but the installed software version is not (all available updates installed).  If I hadn't just purchased the software, I would just submit thru the web.  Any idea why I am not seeing the updates in the installed version for federal?

[SForrestLO]

@TC6872

You can manually update the software, see this Turbo Tax FAQ. Manual Update

[VolvoGirl]

Only the Online version has been updated.  The Desktop program has not.  So a manual Update won't help yet.  If it does let me know.  

[micunurse]

It is taken too long for turbotax to update for $10,200 deduction.

[JeffreyR77]

 Both TurboTax Online and Desktop should guide anyone who hasn't filed yet with unemployment benefits how to file at this time.

[LibaK]

I prepared my sister's taxes and had included her unemployment income. We have not filed it yet. I've reviewed everything and there's nothing in TurboTax that calculated the $10,200 deduction. I have the Desktop version, not the online version. The TurboTax FAQs seem to imply that one should file first and THEN TurboTax will guide you through the steps to get the deduction. Am I missing something? 

"If you haven't filed your 2020 tax return, yet, go ahead and do so. TurboTax will guide you through claiming these additional unemployment benefits."

[Cynthiad66]

No.  The Desktop version of the Unemployment Compensation Exclusion is not available yet.    However, here is some additional information about Unemployment Compensation.   Unemployment Compensation

[LibaK]

UPDATE:  My desktop TurboTax just updated to include the $10,200 deduction!!!  

[Taxes1998]

Does anyone know if the program has been adjusted to reflect the $10,200 deduction for unemployment benefits?

[DoninGA]

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@Taxes1998 wrote:

Does anyone know if the program has been adjusted to reflect the $10,200 deduction for unemployment benefits?

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The unemployment compensation exclusion was updated across all TurboTax platforms, online and desktop, on 03/26/2021.

The exclusion is reported on Schedule 1 Line 8 as a negative number.  The unemployment compensation received is on Line 7 of Schedule 1.  The result flows to Form 1040 Line 8.

Click on Tax Tools on the left side of the screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

[brucenicholas]

I just completed my taxes today, 4/10/21, on the desktop version and the forms are not reflecting the $10,200 credit. 

[VolvoGirl]

The Desktop program was updated on March 26.  Try updating your program.  How to update

https://ttlc.intuit.com/community/installing/help/how-do-i-update-turbotax-cd-download/00/26038

If updating doesn't help then delete the 1099G and re enter it.

Or your income is too high to exclude it.  If you have unemployment you can exclude up to 10,200 if your income is under $150,000.  The exclusion will be on Schedule 1 Line 8 as a negative number. Your unemployment compensation will be on Line 7 of Schedule 1. The result flows to Form 1040 Line 8.