As per the MD comptroller website, you can subtract unemployment taxes that you owe. Where this can be done on the Turbotax website?
The RELIEF Act allows Maryland taxpayers to subtract certain amounts from their federal adjusted gross
income (FAGI). In order to be eligible for the subtraction, these amounts must be included in a taxpayer’s
FAGI for the same year. Please note certain payroll protection programs under the federal Coronavirus Aid,
Relief, and Economic Security (CARES) Act have already been excluded from FAGI under federal law. As
these amounts are not included in a taxpayer’s FAGI, they are not eligible for subtraction on the Maryland
return.
I looked through item 13 Subtractions from Income in the Maryland 2020 State and Local Tax Forms and Instructions and saw no mention of the exclusion for unemployment benefits. Can you tell us on what page and/or instruction number you saw the regulation regarding excluding unemployment benefits in Maryland?
https://www.marylandtaxes.gov/RELIEFAct/docs/2.16.21-748am-RELIEF-Act-Tax-Alert.pdf
I saw it on this link. On page 3. if you are referring to this.
The forms must first be revised by the State of Maryland. Once that is done, TurboTax will then update the Maryland state return in the program. Since the forms have not been released from the State of Maryland, the instructions to complete this in TurboTax are not known at the time.
Also, please keep in mind that the tax free unemployment waiver only appears to apply to single filers who reported under $75,000 or joint filers who reported under $150,000.
For more information, please see the Relief Act Tax Alert. The Maryland website states that the forms will not be ready until sometime in March.
The forms must first be revised by the State of Maryland. Once that is done, TurboTax will then update the Maryland state return in the program. Since the forms have not been released from the State of Maryland, the instructions to complete this in TurboTax are not known at the time.
Also, please keep in mind that the tax free unemployment waiver only appears to apply to single filers who reported under $75,000 or joint filers who reported under $150,000.
For more information, please see the Relief Act Tax Alert. The state website states that the forms will not be ready until sometime in March.
Hello,
Reading very carefully, you are exempts from the state income tax. That means we can exempt from unemployment state taxes. Where can I enter on turbo tax?
Q: What is the Unemployment Insurance Benefits Income Tax Subtraction? A: The RELIEF Act provides a State Income Tax Exemption for Unemployment Insurance (UI)
Benefits for qualifying filers. UI payments are currently subject to federal and state income taxation. Beginning with Tax Year 2020 and including Tax Year 2021, the Act exempts from the state income tax the UI benefits received by an individual earning less than $75,000, and couples filing jointly or individual heads of households earning less than $100,000. (https://www.marylandtaxes.gov/RELIEFAct/docs/Maryland-Unemployment-Assistance-FAQs-FINAL.pdf)
The tax free unemployment waiver only appears to apply to single filers who reported under $75,000 or joint filers who reported under $100,000.
For more information, please see Maryland RELIEF Act Unemployment Assistance.
[Edited 3/7/21 l 9:35AM PST]
@LenaH Yes I understand that and I meet the criteria for the credit and I'm also checking for few of family members who meet the criteria. However, I'm not sure how to exempt unemployment state tax in TurboTax.
Unfortunately, we cannot give instructions on how to exempt your unemployment from taxable income as the forms have not been released yet. Per the State of Maryland, the tax forms will not be ready until sometime in March. Once the state updates the tax return, TurboTax will be able to update the program and provide clear instructions on subtracting your unemployment compensation from your Maryland taxable income.
The Maryland forms have not been updated as of today, 3/13/21. Updates on the availability of forms will be posted on the website RELIEF Act Information. Once the state updates their forms, TurboTax will then have to update accordingly.
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.
Per the instructions on the Maryland government website, they instruct us to change our AGI to reflect the subtraction of unemployment compensation in the state section while filing. How do we do this?
We have not received instructions yet from the office of the Comptroller of MD. When we do we will update TurboTax.
The changes to the federal tax on unemployment benefits should be released later today (March 19). [The first $10,200 of unemployment is exempt from federal tax.]
When will Maryland form 502LU be updated in Turbo Tax as MD is using this for the unemployment deduction? Maryland has release the form over a week ago.
not sure why but I was able to see the reduction on state tax and I was actually getting some refunds but now it's back to I owing them? is this a glitch?
The Maryland tax free unemployment waiver only applies to single filers who reported under $75,000, yet when I amend my return that I filed before the tax act became effective, TurboTax is reducing the entire unemployment amount even though my FAGI substantially exceeds the $75,000. Why is this?
Thanks
The calculations appear to be correct per your post. MD conformed to the federal exclusion plus they added another potential subtraction of remaining MD unemployment benefit from MD taxable income for qualifying taxpayers.
Since you were eligible for the unemployment exclusion of up to 10,200 at the federal level, that reduced your Federal AGI (FAGI) which then transferred to your MD state return. If there was remaining unemployment benefits in the FAGI and it is MD sourced and you meet the income requirements you would have been eligible for a MD subtraction for that amount from your MD income as well.
If however your income was too high, you would not qualify for that MD subtraction of any remaining unemployment benefit from MD taxable income.
Here is a link for reference.
Thank you very much for your response. I think what happened is that the program did not automatically trigger the update for Maryland. When I deleted the Unemployment form then re-entered it, the program then pickled up the changes and reported the correct amount. An old trick I should have thought of sooner.
Thanks, again.
Russell