TurboTax update to 2021 American Rescue Plan

[maximgt]

Why wouldn't TurboTax update their software when ProSeries (Intuit) has been updated the UCE on Friday?

[JotikaT2]

Try doing it now.  The online 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. 

The desktop software is still being updated but you can sign up with the following link for updates.

Sign up for updates on unemployment benefits

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

@maximgt

[craveking]

The 10,200 reduction has been implemented. I saw it on my return. I also see this message from Intuit on my Turbotax screen. The Advance Premium Tax Credit has not been implemented.

"We’re working quickly to address new tax changes included in the American Rescue Plan Act of 2021 (ARPA), which went into effect March 11, 2021.

Any unemployment benefits you’re eligible for as part of the ARPA have been added to your federal return. But, because this act was passed so recently, we’re still updating changes for each state and those who were required to repay any of the Advance Premium Tax Credit.

We expect to have all our updates completed soon, but you don’t have to wait to file your federal return. We'll reach out to you later if changes are needed.
As we continue to work on these updates, we’ll email you if you need to do anything after you file."

[maximgt]

I do not see the UCE on Schedule 1, and my TT software is up to date.

[craveking]

apparently it's implemented in the online version but not the desktop version. Definitely implemented in my return.

[JotikaT2]

The updates have been made for the federal returns using the online program.  The updates are being implemented for the desktop software. 

I recommend signing up for updates using the link below to be notified when the update is completed for the desktop version of the software.

Unemployment update for desktop

Please see the following link as well for updated information as it is released.

How will the 3rd stimulus affect me

@maximgt

[JeanieLMM]

Just finished my taxes on TurboTax Home and Business. And now have to wait to file because TT hasn't updated the software? March 20th already. Unemployment is prepared and working now, Why isn't TT?

[ErnieS0]

As part of the recently passed American Rescue Plan, the first $10,200 worth of unemployment payments are now 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. Once the IRS provides additional guidance, TurboTax will be updated to reflect these new tax laws relating to unemployment. 

If you haven’t filed your 2020 taxes yet and would like to receive progress status updates, please sign up here. 

[JeanieLMM]

What if I already have a an entry on Schedule 1, line 8 worksheet, then Line 22. additional contribution to HSA. Where do I enter the -10200

[ErnieS0]

@JeanieLMM You do not have to enter a subtraction. TurboTax Online automatically does the calculation for you if you qualify for the $10,200 federal unemployment exemption.

If your modified adjusted gross income (AGI) is less than $150,000, the American Rescue Plan enacted on March 11, 2021, excludes from income up to $10,200 of unemployment compensation paid in 2020, which means you don’t have to pay tax on unemployment compensation of up to $10,200. If you are married, each spouse receiving unemployment compensation doesn’t have to pay tax on unemployment compensation of up to $10,200. Amounts over $10,200 for each individual are still taxable. If your modified AGI is $150,000 or more, you can’t exclude any unemployment compensation.

Related Resource:

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

[JeanieLMM]

Expert

The desk top doesn't have that  feature yet.

[Skyraptor]

No you will have to wait.  It is not Turbo Tax that is taking so long but the IRS.  By just reducing the unemployment by $10,200 is not only incorrect but illegal as you will not have the correct forms.  The filing deadline has been extended and by the looks of it you will have plenty of time to file.  Or file and once everything is figured out the IRS will probably do the refund for the unemployment instead of having millions do an amended tax return.

[Skyraptor]

Better do your math better next time.  It would be a refund of $1,020 for the Federal Tax of $10,200 based on 10% withholding, not $1,200.

[Oii]

It has now been updated to reflect the forgiveness on paying taxes for the first $10,200.00 of unemployment.

[maximgt]

I started my TT software on my desktop, and the update did not kick in :(