You are among millions who have now been affected by a mid-tax season change in the tax law. Patience will be necessary.
TurboTax will update the software for the unemployment but there is no timeline yet.
If you have not e-filed yet—-wait. And if you already e-filed and want to amend for this—WAIT.
Please read this very recent news from the IRS:
https://www.irs.gov/newsroom/irs-statement-american-rescue-plan-act-of-2021
The IRS just posted guidance on the unemployment benefits exclusion, which the IRS calls "UCE" Unemployment Compensation Exclusion. Looks like the $10,200 exclusion amount should be reported in parentheses and marked "UCE" on Schedule 1, line 8 of the Form 1040.
Unfortunately, we don't know yet if that will be able to be e-filed or will have to be paper-filed.
You may want to wait to file that on a return until TurboTax has received instructions to implement the change in the software until we know for sure. You would hate to have to mail a paper return to IRS at this time if it can be helped.
IRS is still processing 2019 Paper returns filed last year. On top of that, they have stimulus checks and currently processed returns to be working on.
If you haven’t filed your 2020 taxes yet and would like to receive progress status updates, please sign up here.