New Exclusion of up to $10,200 of Unemployment Compensation

[kategordon]

OK thank you for your details.  I appreciate your time.

Katherine

[Mark173]

Yes, makes sense (depending on your tax bracket).  Means you can deduct over $4k from your taxable income.  If for example you are in the 22% tax bracket, you would save over $880.

[helen_feddema]

Not yet decided -- here is info from NYS Senate Website:

Senate Bill S5125A

2021-2022 Legislative Session

Excludes from state income tax certain unemployment compensation benefits

CURRENT BILL STATUS -In Senate Committee Budget And Revenue Committee

[Erilflynn]

Following...this is interesting seeing I was told Friday by a NYS customer service rep that the issue had just been decided the previous day and NYS would not be giving the exclusion 

[msaaj]

Of course, I would not recommend getting tax advice from an anonymous person on the web who talked to a customer service person (I usually call twice if I want a different answer).  I am planning to wait to file my whole return when everything has been decided. However, NYS is not great at conveying info so we'll see.

[JamesG1]

@Erilflynn

As part of the recently passed American Rescue Plan, the first $10,200 worth of unemployment payments may now be tax-free for a person with an annual modified adjusted gross income of less than $150,000. This expanded tax relief begins this year, starting for taxpayers filing returns after January 1, 2020. 

New York state tax treatment in TurboTax is addressed here.

This news article says that the state of New York may move to exclude these unemployment benefits from taxable income.

Senator Jim Tedisco (R,C-Glenville) today announced he will be introducing new legislation to extend New York State’s individual income tax deadline from April 15th to May 17, 2021, and exclude unemployment benefits from taxable income to be consistent with the federal government.

[helen_feddema]

As of this morning (3/29 at 10:30 AM), the NYS Senate Website still lists S5125A as in committee.

[KimCO]

Does work well.  However, my state (RI) decides that the $10,200 does not apply for state taxation.  I needed override the amount.  Now TT won’t allow me to e-file because of the override!

[JamesG1]

@KimCO

If your state is Rhode Island:

TurboTax calculations have not been updated for Rhode Island. If you haven’t filed your return, you can either:

• Wait for TurboTax to be updated along with your state, or
• File your return now and potentially amend later if they do not follow the federal guidelines.

Are you able to e-file Federal and not file the state tax return?

[DoninGA]

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@KimCO wrote:

Does work well.  However, my state (RI) decides that the $10,200 does not apply for state taxation.  I needed override the amount.  Now TT won’t allow me to e-file because of the override!

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As stated in the TurboTax support FAQ -

Rhode Island (RI)

TurboTax calculations have not been updated for Rhode Island. If you haven’t filed your return, you can either:

• Wait for TurboTax to be updated along with your state, or
• File your return now and potentially amend later if they do not follow the federal guidelines.

[KimCO]

Thanks!  Also, any news regarding update of 1040-X form.  I owe $$, and would rather pay the lesser amount to the IRS.

[JeffreyR77]

First, make sure you really need to amend and that your 2020 return was accepted in TurboTax Online or paper-filed through the mail. You can't amend a return that hasn't been filed yet.

When you're ready to amend, find your situation below and follow the instructions.

TurboTax Online

TurboTax CD/Download

[eugenebar]

Beware: as of Monday morning - Online TT version has NOT been updated yet, and it does NOT exclude $10,200 from the Federal Income (even though personal income is below $150K) - confirmed by the customer support. Their current advise - "file Federal return as is with Tax due check enclosed and IRS should pay you back"; no ETA for bug fixing was provided. Anyone knows when Online version will be updated?

[KimCO]

My 1040-SR was e-filed and accepted.  I just haven’t paid the money owed, and honestly would rather pay $1k versus $3k.  Having to wait for the IRS make any change to amount owed will take eons!

[DoninGA]

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@eugenebar wrote:

Beware: as of Monday morning - Online TT version has NOT been updated yet, and it does NOT exclude $10,200 from the Federal Income (even though personal income is below $150K) - confirmed by the customer support. Their current advise - "file Federal return as is with Tax due check enclosed and IRS should pay you back"; no ETA for bug fixing was provided. Anyone knows when Online version will be updated?

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All the TurboTax platforms have been updated with the unemployment compensation exclusion as of 03/26.

The exclusion is on Schedule 1 Line 8 entered as a negative number.  Your total UC is shown on Schedule 1 Line 7.