TurboTax update to 2021 American Rescue Plan

[cdecrich]

I would wait.

[ifyouseekay]

You should wait to file, as you are forgiven ALL repayment of AFC credits, but TT hasn't adjusted that yet.

[micheleaey]

Today is 3/26/21: I had an update on my CD/desktop Home & Business and thought it was the unemployment exclusion.  I go back into the unemployment and walk through the step by step but NOTHING.  What is going on and when will this be updated?  I thought it was coming in this update?

[BillM223]

It is not possible to make instant updates to tax software just because Congress has passed this or that law. This is for a variety of reasons:

The first reason is that we have to wait for guidance from the IRS on how the IRS is going to implement these changes. 

For example, the law says that the repayment of excess Premium Tax Credit is waived for 2020. You might think that this is clear, but what about the collateral issues?

Self-employed taxpayers who have to repay excess PTC can apply that to the Self-employed Health insurance deduction. Will that still be true when the taxpayer doesn't have to repay the excess PTC? Congress didn't say so the IRS has to decide. Furthermore, the Self-employed health insurance deduction and the Self-employed SEP, SIMPLE, and qualified plans deduction have peculiar interactions where the value of one affects the other. Will this change? Again, Congress does not say so the IRS has to consider all the possibilities and issued rules on how we are to proceed.

The IRS has also said that they are considering automatically calculating the difference in tax for taxpayers who have receive unemployment compensation and sending out refund checks, and have implied that they might do the same for the excess PTC issue. So they have asked taxpayers to wait and not amend their returns until the IRS decides what it is going to do.

This, too, will affect TurboTax's response: to amend or not to amend?

Even when TurboTax receives the guidance that hasn't come yet, there is still work to do. 

• TurboTax has to read and understand the guidance and design a response.
• TurboTax has to code the underlying code
• TurboTax has to design and create the screen for the interviews
• TurboTax has to design the changes to PDF forms (if any) and to the XML forms that are e-filed
• These changes have to be approved by the IRS
• TurboTax has to create test cases to test the changes
• TurboTax has to create regression tests to make sure that the changes did not break something else
• TurboTax has to create documentation for internal and external audiences
• TurboTax has to package the changes so that they can be rolled out to Online servers and to CD/download software users

In short, you and we will have to wait until the IRS issues guidance on how these tax law changes are meant to be interpreted and implemented - and this will take time. 

Normally, tax laws changes are finished before December 31st, but this has been a year of "moving the goalposts" on practically a daily basis. It is very difficult to plan anything when the Congress, the IRS, or the states change the rules on the fly.

Give the process a chance - when TurboTax knows something, then you will know something shortly thereafter as TurboTax works through the steps I listed above.

[cmBarron]

@micheleaey, go into TurboTax, completely delete any and all unemployment income (1099-G) that you have previously entered, save the file, close TT. Now, go back into TT and enter your unemployment from scratch. This was the advice given to TT Online users last week, and it worked for me today with TT Desktop.

[cmBarron]

@BillM223  Thank you for your detailed response. I know it is a complicated process. I am waiting patiently. I get frustrated on behalf of all the TT employees when I see others getting upset about the process. I know you all can't make the changes overnight. Please know that I appreciate all the hard work you and your co-workers are doing.

[micheleaey]

@cmBarron  Makes sense.  I ended up going into the forms view and finding it was there.  Because of the way my return is, my refund showing at the top did not change.  A carryforward credit I have on a form 3800 just decreased the amount being used to pay the taxes due, making the refund amount at the top of the page the same.  So I confused myself by not going into the forms view where I saw it was there and accounted for.  

So the update I downloaded did fix everything, just dont know if it did it by itself, my going back into the step by step activated it, or what, but after I make my comment I found it was there.  Just dont know how exactly it worked itself into the form to be able to help anyone else.  All I know is I updated the turbo tax today with the new update, went immediately into the unemployment step by step, which did not say anything about the $10,200 exemption, but just took me to the questions already there, then when i hit done, nothing changed I could see until I went into the forms and saw on the 1040 worksheet and the schedule 1 and was able to follow all the rest of the numbers through my return.  

[LinaJ2020]

Per IRS, if you have already filed your 2020 Form 1040 or 1040-SR, you should not file an amended return at this time. The IRS will issue additional guidance as soon as possible.

See IRS link, click here:  https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation

For TurboTax program, to sign up for being notified for the updates, click here: Unemployment exclusion

[craveking]

I think most of us understand this but many were relying on Intuit's guidance which suggested the updates would be ready by the evening of the 18th, over a week ago. 

"In some cases, they might not have to wait much longer — TurboTax expects to have updated its software by Thursday evening, according to spokeswoman Ashley McMahon.

“We’re working around the clock to make updates to TurboTax based on the recently enacted American Rescue Plan so our customers can file with confidence and get their maximum refund,” McMahon said."

Maybe she meant a "partial" update. Regardless, they overpromised.

[ifyouseekay]

Thanks for your thorough reply. I don’t mind waiting; although it would have been nice to have heard that same info from Intuit. I will patiently wait for an update.  Some other post said that TT told them to check back daily. That does not seem acceptable, to me.  I am okay if I just wait and am notified of when the updates occur

[danweber2021]

Thank you @BillM223 for the details you provided, this is VERY helpful.  I am sure you are aware there are many loyal interested TurboTax customers that are seeking information and updates on this.  I can appreciate the various steps and entities that need to collaborate and work on these updates, including of course the required guidance from the IRS.

The law made it clear that repayment of excess Premium Tax Credit is waived for 2020, but did not address aspects of this related to those who are self-employed.  I appreciate there are further possibilities to consider, but wouldn't it be possible to create a partial update to address the waiver fo the Premium Tax Credit (PTC) for those who are NOT self-employed?  I would imagine that there are lots of folks who are affected by the PTC waiver that are not self-employed.  Perhaps more than half of those receiving the PTC are not self-employed.  Does TurboTax need to wait until there is 100% clarification on every single aspect of the PTC waiver for self-employed, small businesses, LLCs, S-Corps, etc. before it can code, test and release an interim update that partially addresses the PTC waiver for the subset of taxpayers who are not self-employed?

Could you please ask the decision makers to consider making this update.  Another reason for urgency in filing for many folks is that each year many electronic returns are rejected due to tax identify theft, so the sooner a taxpayer can file, the better.

Thank you for taking the time to read this.

[sallypaceassociates]

Are we ready to use Turbo tax to file 2020 returns - is the update complete

[gjp]

Now that the Federal portion of the unemployment deductions was updated, there are many states that have also been updated. New York is one that has not been updated as of yet. I decided to file the Federal potion and await until the State is updated. Do you have a timeline when New York will be updated?

[DoninGA]

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@gjp wrote:

Now that the Federal portion of the unemployment deductions was updated, there are many states that have also been updated. New York is one that has not been updated as of yet. I decided to file the Federal potion and await until the State is updated. Do you have a timeline when New York will be updated?

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See this TurboTax support FAQ for taxing unemployment by state - https://ttlc.intuit.com/community/internal-revenue-service/help/how-is-my-state-taxing-unemployment-...

[maximgt]

The UCE software update has been a pure embarrassment. It’s just unacceptable that Intuit cannot commit to a date or service their clients, as they should. It’s been more than 2 weeks and counting. Speechless. By the way, I called NYS yesterday; no decision or guidance was available regarding the UCE deduction. I was told to keep checking updates on the NYS website.