it is not a credit but a reduction in the taxable amount of unemployment comp. schedule 1 line 8 and the $150K is based on modified adjusted gross income not necessarily the AGI on the return.
Unemployment Compensation Exclusion Worksheet – Schedule 1, Line 8
1) If you are filing Form 1040 or 1040-SR, enter the total of lines 1 through 7 of Form 1040 or 1040-SR. If you are filing Form 1040-NR, enter the total of lines 1a, 1b, and lines 2 through 7.
2) Enter the amount from Schedule 1, lines 1 through 6. Don't include any amount of unemployment compensation from Schedule 1, line 7 on this line.
3) Use the line 8 instructions to determine the amount to include on Schedule 1, line 8, and enter here. Do not reduce this amount by the amount of unemployment compensation you may be able to exclude.
4) Add lines 1, 2, and 3.
5) If you are filing Form 1040 or 1040-SR, enter the amount from line 10c. If you are filing Form 1040-NR, enter the amount from line 10d.
6) Subtract line 5 from line 4. This is your modified adjusted gross income.
7) Is the amount on line 6 $150,000 or more?
a. [ ] Yes. Stop You can't exclude any of your employment compensation
b. [ ] No. Go to line 8
line 8 instructions
😎 Enter the amount of unemployment compensation paid to you in 2020. Don't enter more than $10,200.
9) If married filing jointly, enter the amount of unemployment compensation paid to your spouse in 2020. Don't enter more than $10,200. If you are filing Form 1040-NR, enter -0- .
10) Add lines 8 and 9 and enter the amount here. This is the amount of unemployment compensation excluded from your income.
11) Subtract line 10 from line 3 and enter the amount on Schedule 1, line 8. If the result is less than zero, enter it in parentheses. On the dotted line next to Schedule 1, line 8, enter "UCE" and show the amount of unemployment compensation exclusion in parentheses on the dotted line. Complete the rest of Schedule 1 and Form 1040, 1040-SR, or 1040-NR.
note that Turbotax online is supposed to do the calc for line 8. desktop is supposed to be ready 3/26
if you already filed the IRS does not want you to amend at the present time. they may automatically do the calculations and make a refund.
note that the limit is $150K per tax return. so can a husband and wife with MAGI of say $100,000 each file separately so that they get the exclusion because on a joint return their MAGI is over $150K so no exclusion.
people are already complaining to their Congresspeople about the inequity for a married couple vs single person.
