Need guidance on amending 2020 tax return for the $10,200 tax deduction (New Mexico)

[goseeski]

Hi, sorry if I come off as a idiot on this, but I'm pretty clueless on amending taxes since I've never been in this situation before, so please bear with me if I get lost in the terminology. Long story short I'm in the process of trying to amend my taxes for both my brother, and for both the same reason: to apply the $10,200 unemployment tax deduction using Home & Business CD version and my state (NM) requires to manually amend. But I need a step by step guidance on what to do and need some questions answered as well. And yes we both make under $150,000.

• 1099-G in "Unemployment or Paid Family Leave Compensation Received"  will I have to manually deduct the 10,200 from the original amount shown on the 1099-G statement from box 1 or leave it all alone as is? Also, if the unemployment compensation is less than $10,200 (in my brothers case)  do put it at 0 or what? 

• On the state section I'm greeted with the PIT-X Form "about your New Mexico Amended Return" it's asking for me to correct any errors in the previously filed return. As far as I know there are none, and again the only modification I'll be doing on both returns is the $10,200, so do I leave the section alone? If not what do I have to enter or modify?

I know I have a ton more questions, but if anyone can illuminate me on what the procedure is for this I would really appreciate it, and again be patient with me please because I'm a neophyte when it comes to this stuff.

[Bsch4477]

Do not amend your federal return since the IRS will correct your return in May.  I don’t know NM tax law or if the state has decided how to handle the unemployment deduction. 

[goseeski]

I'm well aware of the Feds taking care of the unemployment tax deduction, however New Mexico is one of those states where you have to amend as indicated on this link:

• Yes. New Mexico recommends amending your return to claim the $10,200 unemployment adjustment. Sign in to TurboTax to file an amended Form PIT-1, Personal Income Tax Return. See the New Mexico Taxation and Revenue bulletin for more information.

Unless I'm interpreting what the link says? Can anyone else tell me otherewise?

[JotikaT2]

Yes, you will need to amend your New Mexico return.

Please see the links below for more information and guidance.

State updates to unemployment

Steps to amend a state return

[goseeski]

Hi JotikaT2, thanks for the links but as I was already aware of both of them they really don't answer my question on how to input the $10,200 tax deduction in the software (which I'm already using by the way). Can you at least give feedback on my questions please or if you have an answer? Thank you.

[DMarkM1]

The TurboTax updates have automatically excluded the unemployment income per the American Rescue Plan.  You will need to either have a copy of your originally filed NM return or add the excluded income back in and print a copy of your original NM return.

If necessary, in TurboTax desktop versions follow these steps to add the excluded income back in.  

1. Click the "Federal Taxes" tab
2. Click the "Wages and Income" tab
3. Select "I'll choose what to work on"
4. Scroll down to the Unemployment" topic
5. Revisit the "Unemployment form 1099G" topic
6. If the amount in box 1 of your 1099G is 10,200 or more add 10,200 to the box 1 amount (amount shown on your actual form) in order to eliminate the exclusion and get to the original taxable amount
7. If the amount in box 1 of your 1099G is less than 10,200 then double it in box 1 in order to eliminate the exclusion and get to the original taxable amount
8. Click "File" in the upper left
9. Click print and print your NM return
10. Go back to step 1 through 7 to subtract the amount you added in earlier back out

Once you have copy of your original return you can amend the state return.

1. Click "State taxes"  to return to the state interview
2. "Continue" the state
3. Click through to near the end of the interview to find the "Amend your state" option
4. Click "Yes"
5. Put in the requested information from your original return
6. Answer "Yes" that you have changes
7. Now you will have two columns one with the current/amended data and another for the original information.
8. Using your printed copy of the original return fill in the lines for the original return.
9. Keep a note of the lines that changed so that you can put that in the explanation area. 
10. The reason for the change will be "To exclude non-taxable unemployment income." 

[edited 4/29/2021 4:10pm EDT]

[goseeski]

I'm confused unfortunately by a lot of these pointers:

1: I've already filed, and I've yet to save an amended version where it prompts if I want to begin one. Secondly, since I'm using the offline version, I've never had to set up an online account before so I guess that excludes step part 2. and 3.

4.  "Revisit the "Unemployment form 1099G" topic" and where is the link to this?

5. This section is confusing because it's assuming that I'm using an online version and it's already changed the amount, when I start the amendment process the amount was never changed, so I'm assuming I leave it alone. Or am I wrong here? For example it's showing both $19,000 on my 1099-G and also Turbotax. Now what?

6. So basically if I have $8000 for example, I double that and put in $16000?

7-12. Ok, self explanatory

13. So after step 12, I get to the "about your New Mexico Amended Return" section where it asks if I want correct any errors on the PIT-X. So is this step telling me to gack back to my personal income section and deduct the $10,200 again and go back to the state part? This is so confusing.

As you can see I am completely lost in all of this and if anyone else who has already completed their amended returns and in a similar boat as I am I would greatly appreciate this because these steps are counter-intuitive and I really need more help.