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acs11012
Returning Member

Unemployment Tax $10,200

For some reason the UI tax break isn’t changing my refund. I’m under the 150,000 threshold so I’m not sure why. I can see it being deducted on my 1040 preview though.

 

but it’s odd because I tweaked my income to read 150,001 as a test to see if it would change my refund but didnt change and my 1040 preview reflected the 10,200 reduction still even with the 150,001 agi. 

is this is system error? How do I fix it? 

3 Replies
JohnW152
Expert Alumni

Unemployment Tax $10,200

There’s no known system error related to this, but you might want to make sure that your modified adjusted gross income (MAGI) – which can be different from your adjusted gross income – is beneath the $150,000 limit. 

According to the Unemployment Compensation Exclusion Worksheet – Schedule 1, Line 8 on the IRS's New Exclusion of up to $10,200 of Unemployment Compensation page, the calculation for MAGI is calculated on line 6 of the computation below.

  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 
  8. 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.
NCperson
Level 15

Unemployment Tax $10,200

it may not depending on your tax situation. 

 

it can't take the tax liability below zero. what is on line 24? 

 

play with the UE a little and see if Line 24 changes.

 

do you have children and getting the child tax credit? 

 

in fact, what what happens to all the lines between line 16 and 24 as you change the unemployment income 

 

 

SweetieJean
Level 15

Unemployment Tax $10,200

The $150,000 cap is for MAGI, calculated as described here:

New Exclusion of up to $10,200 of Unemployment Compensation | Internal Revenue Service (irs.gov)

Given that, do you still qualify?

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