Unemployment Insurance income from 2020

[JamesG1]

For Maryland, this TurboTax Help states:

Calculations are correct and up-to-date for your state. You can go ahead and finish and file your state return.

The American Rescue Plan makes the first $10,200 of unemployment payments per taxpayer, tax-free on your federal tax return for households with an annual income under $150,000.

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.

[dbadkn12]

Maryland State passed the legislation to waive state tax for ALL unemployment income for 2020 and 2021 for Individual who earned less than $75000.

Federal waived the 1st $10,200 for individual who earned less than $75000

How can the calculation be correct for Maryland tax. Turbotax Premier software only excluded $10,200 from Adjusted income

[LenaH · Accepted solution]

The Maryland forms have not been updated by Maryland yet. Per the State of Maryland, the tax forms related to the RELIEF Act signed into law on February 15, 2021, will not be ready until sometime in March. Updates on the availability of forms will be posted on their website on the page RELIEF Act Information. Once these forms are updated by the State of Maryland, TurboTax will be able to update the return.

Furthermore, the State of Maryland released a Tax Alert on 3/11/21, which states that all individual, corporate, pass-through entity, and fiduciary income tax returns that otherwise would have been due on varying dates between January 1, 2021 and July 15, 2021, inclusive, are now due on or before July 15, 2021. 

Maryland Tax Alert 3/11/21

@dbadkn12

[dbadkn12]

Great answer.

Really appreciate

[haphan100]

I also use 2020 TurboTax Premier to do my tax. This software does not have updates to exclude UI income of $10200 from Federal Tax Return. I want to ask about Federal not State. Does anyone know if Intuit has updates for Federal exemption of this $10200? 

Thanks,

[MichelleLO]

TurboTax is up-to-date with the latest federal changes. For more information, please see How do I claim the new unemployment benefits in TurboTax?

@haphan100

[cjramos72]

The $10,200 exemption for unemployment seems to be added back in the social security worksheet. Please take a look at Line 3 of the worksheet. It's adding back the full amount of the unemployment. 

It's deducting the $10,200 on Schedule 1 Line 8, but adding the FULL AMOUNT (NOT JUST THE $10,200) in the social security benefits worksheet Line 3.

Am I reading these wrong? Please respond ASAP. Thanks.

[DawnC]

Line 3 should be the amount on Line 9 of Schedule 1 - which includes the full amount of unemployment on Line 7 and the exclusion on Line 8.   The social security benefits worksheet that I am looking at has the correct amount transferred.   Lines 2b, 3b, 4b, 5b and 7 of Form 1040 will also be included in that Line 3 amount.     @cjramos72

So, you should see the full amount but you should also see the exclusion.    There may be multiple line items on Schedule 1, Line 8.   There is a scroll bar with arrows next to that line that you can click on to see the other entries that may be hidden.  

[1099erGirl]

Our situation is a bit different. I received my 2020 UE benefits when worked stopped for a few months. We paid 10% taxes and didn't get the relief yet with federal because we filed too early in March. I understand the IRS is auto fixing this and we won't need to file amended. We are FINALLY as of this week scheduled to get a paper check of the $1400 each for the 3rd stim payment. Took forever, but I figure it was b/c they had to look at our 2020 taxes which were incorrect due to this change they wanted to auto fix. I wonder if the pay back for the taxes I paid will be with those 2 checks. We'll see this week.

But in the meantime, my hubby qualified for PUA in 2020 but UE didn't pay him any of those weeks for June - August 2020 until March 2021 b/c of an interview question they needed to ask him by phone that took them til March 2021 to ask!!! (Yes the wait was ridiculous!)

So once they called, he got paid for those 11 weeks of 2020 UE that they were behind on from last year. How will this tax break work for us? B/c they didn't pay us until 2021, even though it was for 2020 UE, will we miss out on that tax break? It accounts for about $800-1000 federal that we would have gotten back had they just paid us right last year. (I assume states aren't giving this same tax break, right? That they are only refunding whatever was paid to Federal?) 

[rhilljones]

I checked my account transcript on the IRS website and I don't see a credit for me at this time.  Do I need to enter an amendment to my 2020 taxes although I received an email stating I do not from TurboTax?

[DoninGA]

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@rhilljones wrote:

I checked my account transcript on the IRS website and I don't see a credit for me at this time.  Do I need to enter an amendment to my 2020 taxes although I received an email stating I do not from TurboTax?

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No you do not have to amend the 2020 tax return for the unemployment exclusion.

The IRS is calculating the tax refunds based on the exclusion for all of those eligible.  They have started issuing refund in May and will continue in phases through the summer on the millions of returns which are eligible for the exclusion.

Go to this IRS website for information - https://www.irs.gov/newsroom/irs-begins-correcting-tax-returns-for-unemployment-compensation-income-...

And this IRS website for exclusion FAQ's - https://www.irs.gov/newsroom/2020-unemployment-compensation-exclusion-faqs