Unemployment Exclusion updates

[JohnC829]

I have purchased CD version of TT

I have completed but not yet submitted my Federal and State taxes

I need to know when the software update will be included so that my proper unemployment will be reflected.

As of 3/25/21 --it still doesnt seem to be updated???

[Hawk3m]

I  have same issue. Would like answer on this too since last we heard TT software was to be updated March 19th

Plus how do we handle State Taxes like CT  will use the new AGI after  $10200 exemption taken by IRS but if we have already filed and the IRS will handle changes to AGI (based on 1099G  I guess) how will the state know of the update if no amendments need to be filed

[RayW7]

As soon as the IRS issues final instructions on how to report newly-exempt 2020 unemployment payments, TurboTax will make the necessary updates to its programs. Until those changes are made, you have two options:

1. File now and...there is no need to file an amended return (Form 1040-X) to figure the amount of unemployment compensation to exclude. The IRS will refigure your taxes using the excluded unemployment compensation amount and adjust your account accordingly. The IRS will send any refund amount directly to you.

2. File after IRS instructions are released and the programs have been updated.

From How will the third stimulus impact me?:

"We’re working hard to keep TurboTax up to date with the latest tax changes based on instructions we receive from the IRS. Check back soon to add your unemployment income and file your return."

[Hawk3m]

What about the State taxes not addressed in your reply

[Cynthiad66]

Each state is different.  Some states tax unemployment and some do not.  Some states will follow the federal lead and exclude $10,200.00 and some states will not.  However, the good news is that TurboTax will roll the federal adjustment into the states returns and it will be handled appropriately.

The IRS, and most states, consider unemployment payments as taxable income, which means that you have to pay tax on these payments and report them on your return. With this new law, if your household income is less than $150,000, the first $10,200 of unemployment per taxpayer, will be tax free on your federal tax return, but any amount you receive above that will be taxed.

We are actively working to update the states to account for these new federal changes.

[Hawk3m]

Still no answer as to how do we handle State Taxes like CT who will use the new Federal AGI after $10200 exemption taken by IRS. But if we have already filed Fed & CT State and the IRS will handle changes to AGI  then how will the state know of the update if no amendments need to be filed. Have you seen any State announcements saying they will automatically adjust the AGI to account for the $10200 exemption.

[MaryM428]

We do not yet have guidance on how the states are going to handle this situation.  There have been no announcements made.  TurboTax will be working with the states to find the best way to handle this change in the tax law and be sure that everyone who paid state taxes on their first $10,200 or unemployment and is entitled to a refund of that money will get their money refunded.

American Rescue Plan

[Carl]

My desktop version of Home & Business was updated on 3/25/2021. It looks like it's in there now. To check, switch to forms mode.

On the left column click on "Schedule 1"

On the Schedule 1 line 8, Other Income should have the letters "UCE" on it, and the amount excluded (maximum of $10,200 as I understand it) is to the far right on that line.

One thing I not clear on though. If you're filing a joint return and both spouses received unemployment, I don't know if the maximum 10,200 exclusion is for each tax filer, or if it's the max allowed per tax return. So if this "concern" applies to you, would be curious to know if the amount on line 8 is more than $10,200.

[JohnC829]

Seems that the FEDERAL taxes have indeed  been corrected (Thanks Turbo Tax)

-- and now I will wait for the STATE tax software to be updated.  I hope the updates are made before May 17 since it would be a shame to pay a BIG chunk of additional taxes only to be refunded with no interest many weeks later by my state.    :(

Thanks Again TT  and I'll follow any further developments.

[DoninGA]

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@JohnC829 wrote:

Seems that the FEDERAL taxes have indeed  been corrected (Thanks Turbo Tax)

-- and now I will wait for the STATE tax software to be updated.  I hope the updates are made before May 17 since it would be a shame to pay a BIG chunk of additional taxes only to be refunded with no interest many weeks later by my state.    :(

Thanks Again TT  and I'll follow any further developments.

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See this TurboTax support FAQ for the current status of states taxing unemployment - https://ttlc.intuit.com/community/internal-revenue-service/help/how-is-my-state-taxing-unemployment-...