Has anyone else found Turbotax wrongly calculates the unemployment compensation exclusion for married filling jointly in community property state?

[vlutan]

See https://www.irs.gov/newsroom/2020-unemployment-compensation-exclusion-faqs-topic-a-eligibility.
This topic indicates each person in a CP state can exclude $10,200, so a total of $20,400.
In my case, only I received unemployment and TurboTax excluded $10,200, not the CP amount allowed.

[VolvoGirl]

I don't understand your question.  Each person can exclude 10,200 from their own unemployment.  You said only you had unemployment so that's 1 person.  

[Mike9241]

If you file a Married Filing Jointly return, when completing the Unemployment Compensation Exclusion Worksheet – Schedule 1, Line 8, you should report half of your unemployment compensation and half of your spouse's unemployment compensation on line 8 of the worksheet and your spouse reports the other half of your unemployment compensation and half of his or her unemployment compensation on line 9 of the worksheet. Do not enter more than $10,200 on either line 8 or line 9 of the worksheet. If your joint modified AGI is less than $150,000, you and your spouse can exclude up to $10,200 each. Do not exclude more than the amount of unemployment compensation you report on your Schedule 1, Line 7.

so you split your UC 50/50 then on the split amounts up to $10,200 can be excluded. to reach the maximum your UC would have to be $20,400. 

enter 2 1099-G's one for you one for spouse and split the amounts for line 1

[AmeliesUncle]

The IRS just came out with this information this week.  Of course the software is not programmed for that change yet.   *IF* they change their programming, their usual turn-around time is about 3 weeks.

[macuser_22 · Accepted solution]

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@Mike9241 wrote:

If you file a Married Filing Jointly return, when completing the Unemployment Compensation Exclusion Worksheet – Schedule 1, Line 8, you should report half of your unemployment compensation and half of your spouse's unemployment compensation on line 8 of the worksheet and your spouse reports the other half of your unemployment compensation and half of his or her unemployment compensation on line 9 of the worksheet. Do not enter more than $10,200 on either line 8 or line 9 of the worksheet. If your joint modified AGI is less than $150,000, you and your spouse can exclude up to $10,200 each. Do not exclude more than the amount of unemployment compensation you report on your Schedule 1, Line 7.

so you split your UC 50/50 then on the split amounts up to $10,200 can be excluded. to reach the maximum your UC would have to be $20,400. 

enter 2 1099-G's one for you one for spouse and split the amounts for line 1

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Agreed. I was about to post the same thing.

For example: if one spouse had $18,000 unemployment and the other has zero then in a non-community property state the maximum exclusion would be $10,200.    In a community property state each spouse enters $9,000 unemployment so on the return the exclusion will be $18,000 (up to $10,200 for each spouse).

That is one of the few tax advantages of living in  a community property state.

[Starskull]

I just discovered this by accident when I was filing an amended to correct a different error and it unexpectedly said we were owed $2500 between federal and state. So the software now accurately reflects this. What I really want to know is - if I hadn't gone in to make the other change, would TurboTax have alerted me to amend? Or would I have unknowingly lost out on this? 

[kostopst]

According to the IRS website, they will go through tax returns this summer and give the UCE as needed.

However, when I checked my TurboTax software in May, they only showed the $10,200 exclusion for us MFJ in CP. But I checked again in June, and my TurboTax correctly shows the higher exclusion of $20,400. So that's a huge difference for our expected refund. Now I'm still waiting for IRS to calculate and send the refund.

I sure hope the IRS gets the refunds correct, with all these tax code changes in this crazy year...

[kostopst]

Update: the IRS has adjusted my 2020 return for both the UCE and the RRC, and it was exactly the same as the TurboTax calculated.

So no need to amend, unless if there's other issues.

[Circlespinner]

The IRS calculated my additional refund for the Unemployment Compensation Exclusion and used the $20,400 credit despite my being the only spouse that earned this income.  Turbo Tax is apparently not taking the full credit as interpreted by the IRS,  which is leaving money your owed on the table if you earned more than $10,2400 in unemployment last year.  

[Circlespinner]

Did you earn more than $10,200 in unemployment?

[kostopst]

Yes, earned by one spouse only in Calif., a community property state. TurboTax software correctly calculated our UCE as $20,400 sometime in June, which is what the IRS calculated as well in August.

[Mike9241]

do you live in a community property state? in a non-CPS, the exclusion applies separately to each spouse that got UC. in a CPS state, if one or both spouses got UC the law splits the total UC 50/50 and each spouse gets an exclusion equal to the lesser of their portion or $10,200

[reallymeamom]

I received a fed notice stating that now I owe instead of getting a refund.  Should I amend my federal considering the notice was regarding Recovery Rebate credit?  I was the only one who collected UI.  I'm in California.  Filed Married/Jointly.

[VolvoGirl]

The IRS is usually right.   Amending probably won't  change it.  Why did you have the wrong amount on line 30 for the Recovery rebate credit?   Did you not get one of the first 2 Stimulus payments?   Or qualify for more?

If you claimed a missing stimulus payment on your return but the IRS took it off you have to ask the IRS. They think they already sent it to you. Did you get the 2nd round after you filed your return?   Maybe it went to an account you don't remember. Or you got a check or a card. It was probably easy to miss the debit card in the mail and think it was junk mail. They have to put a trace on it.

How to put a trace on a missing 1st or 2nd Stimulus payment.  IRS for Payment Issued but Lost, Stolen, Destroyed or Not Received

See question F3 here, you can expand it to see how to put a trace on it.

https://www.irs.gov/newsroom/2020-recovery-rebate-credit-topic-f-finding-the-first-and-second-econom...

[reallymeamom]

Hello,  Thank you for the response.  I had 1800. for the line 30 rebate.  All stimulus's received.  My calculations are exactly what I see in the amended IRS calculations...which is why I'm so confused.  I have tried (and failed) to get through to IRS...I will persist!  The notice references amount computed incorrectly (683D), but I have yet to locate what (683D) entails.  I have clicked ALL the IRS tabs.  I'm about to start day drinking...😬🤷🏼‍😂