TOPIC: Unemployment Compensation Credit $10, 200 When should I file 2020 taxes to be sure this credit is included?

[fanfare]

maybe you should file a request for automatic extension of time to file. (Form 4868)

[palma706]

IRS has issued guidelines as of Saturday, March 13 ... I don't think TurboTax is up to date on this.

[ecr57]

As of 3/13 2:00 PM EST, it is clear they have not made the change to the downloaded program to address this. You can test it by putting in $0 unemployment income and then try $10,200 UI.  If you get different results in your tax owed/refund, then the software is thinking you owe tax on the first $10,200 UI, which now shouldn't be taxed.  I suspect this will be fixed within 2 - 3 days.  

[CarissaM]

The IRS will provide guidance soon on how unemployment changes will be handled. 

You can view how the stimulus will affect you here. 

[philkrtz]

This deduction is still not in TurboTax..when will it be?

[Irene2805]

As part of the recently passed American Rescue Plan, the first $10,200 worth of unemployment payments are now tax-free for households with annual incomes less than $150,000.

For information on these unemployment benefits, please see the TurboTax Help articles below.  You can sign up to be notified when the information becomes available:

• If you have already filed: How do I get the new unemployment benefits if I’ve already filed my taxes?
• If you have not yet filed: How do I claim the new unemployment benefits in TurboTax?

@philkrtz

[ronr32]

Just updated TT with 3/18 update and it appears the program is still not updated to account for the $10,200 being considered tax free income.

[DawnC]

It is not updated yet.  You can sign up here to receive an email notification when the changes have been fully implemented.  @ronr32    When it is completed, you will be able to exclude the first $10,200 (per taxpayer) of unemployment in the method the IRS has approved.   

[cabridgemama]

there was another update on TT on 3/18 - still not addressed!!   But we have until May 17 to file...guess I'll have to wait and keep trying.

[JotikaT2]

If you are in the online program, try doing it now.  The program has been updated to automatically apply the adjustment for unemployment as long as you have entered it in the appropriate section as outlined below.  If you are using the downloaded software, the program is still being updated.

You will enter the unemployment information in the federal interview section.

1. Select Income & Expenses
2. Scroll down to All Income and select Unemployment
3. Select Unemployment and paid family leave
4. You will be able to enter your information from your Form 1099-G

The adjustment will be reflected on Schedule 1, Line 8G.

IRS Statement on American Rescue Plan

@cabridgemama

[Dnanni7500]

Filed my taxes before this went into affect.   Will Turbo Tax automatically recalculate ?   Has there been any update as to what we are to do that filed before this $10,200? Thank you 

[gloriah5200]

Good News for those who received unemployment but already filed their return!

Here is a message that IRS put out today regarding those who received unemployment but have already filed their return:

If you have already filed your 2020 Form 1040 or 1040-SR, there is no need to file an amended return (Form 1040-X) to figure the amount of unemployment compensation to exclude. The IRS will refigure your taxes using the excluded unemployment compensation amount and adjust your account accordingly. The IRS will send any refund amount directly to you.

For additional information, refer to the following link:

IRS - regarding unemployment changes for early filers
 

[druellen1]

When will it be updated? it is getting close to filing time.

[gloriah5200]

IRS has extended the filing deadline until May 17 for this year.  If you may be filing after that date, then you can complete the extension Form 4868 to cover you until October 15, 2021.

The online version of TurboTax has been updated with the unemployment compensation exclusion but the desktop version has not been.  We are expecting an update on March 26 for the desktop version and are hoping the unemployment exclusion update will be included in it.  Please check the software later in the day on 3/26 for the update.