Unemployment deduction upto 10200 and turbotax

[HonestTaxfiler]

My wife earned unemployment income approx 19000. we opted to deduct 10% tax at source. We are doing married filing joint return for 2020 with MAGI of 148000(well under 150k thresold under american rescue act).  My question is will turbotax automatically apply unemployment tax credit upto 10200 for my wife out of 19000 earned.? Do i need to do anything special or taken care by turboxtax automatically?

[xmasbaby0 · Accepted solution]

The software will take care of it automatically.   You do not have to do anything special to apply the recently passed tax law.   Just enter the 1099G and the tax that was withheld.

Enter your 1099G in Federal>Wages & Income>Unemployment

Go through the screens very carefully, making sure to enter any federal/state tax you had withheld from the unemployment.

[HonestTaxfiler]

thanks, but i had imported the form 1099-g even before the act was passed? do you recommend deleting it and importing it again? or is it automatically calculated and taken care of during final submission of tax filing?

[xmasbaby0]

Delete it and re-enter it so that you will feel confident that it has been calculated correctly.

[VolvoGirl]

May I ask..... you imported it?  I didn't think you could import a 1099G for unemployment.  

[xmasbaby0]

@VolvoGirl Good catch---I do not think you can import a 1099G either----you need to key it in.   

[HonestTaxfiler]

Thanks i deleted and re-entered and it did not seem to affect final figure. So it looks like it automatically calculated regardless. thanks again

[HonestTaxfiler]

Sorry i meant keyed in. thanks

[VolvoGirl]

Maybe you need to check your income again.  You are very close to the max.  I don't know how or if the full unemployment included in income before the exclusion, etc.

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

[HonestTaxfiler]

Good point, will double check. One wierd thing i found was if i delete my 1099-G, then my federal tax refund just increased by 50 bucks  when i re-added it, it decreased by about 50 bucks. I was expecting on an unemployment income of 19200(for a married filing joing with MAGI under 150k is approx 148k), the amount of refund should have been close to 1000. Since 1922 was witheld from my income of 19200, if it took unemployment tax law into account the tax should have been computed on 19200-10200 = 9000. on a 9000, the tax would approx come to 900. So 1922-900 = approx 1000 which is not the case.

Can you explain this anamoly which is puzzling?

[Jeffrey Oakar]

VolvoGirl, just so I am clear from your response, I have to do the subtraction manually or the program knows about the 10200 credit and does it for me? I'm confused because I don't see anywhere on my Turbo Tax where it deducts it from what I got last year. Thanks!

[xmasbaby0]

@Jeffrey Oakar The software will take care of it automatically.....you do not do any of the calculation for the unemployment,   All you need to do is enter your 1099G and let the software do the rest.

You will have to enter a 1099G that is issued by your state.

Some states will mail out the 1099G.  Or you might need to go to your state’s unemployment website and use the password, etc. that you have been using to certify for weekly benefits to get your 1099G from the state’s site.

Enter your 1099G in Federal>Wages & Income>Unemployment

Go through the screens very carefully, making sure  to enter any federal/state tax you had withheld from the unemployment.

[VolvoGirl]

Turbo Tax is updated for the 10,200 exemption.  You don't have to do anything special to get it.  It is automatic.  Just enter the full amount on your 1099G.  Your unemployment compensation will be on Schedule 1 line 7.  The exclusion will be on Schedule 1 Line 8 as a negative number. The result flows to Form 1040 Line 8.

If the exclusion doesn't show up and reduce your income then delete the 1099G and re enter it.

If you have unemployment you can exclude up to 10,200 (for each spouse) if your income is under $150,000.  Your unemployment compensation will be on Schedule 1 line 7.  The exclusion will be on Schedule 1 Line 8 as a negative number. The result flows to Form 1040 Line 8.

[Jeffrey Oakar]

Thanks for the help!

[Jeffrey Oakar]

Thanks for the help! I am using the Turbo Tax program that I purchased and downloaded online. FOR SOME REASON, I don't know why, I put in the full amount for my spouse and I and I don't see the 10200 dollar credit anywhere. Actually, with the both of us, it should be 20400. I'm very confused why it is not showing me that the credits were applied. Actually, my federal refund went down so that is why I feel like I am not getting the credit. 

:(