Tax Year 2020: TurboTax Updates on Unemployment Tax Relief

[wfilbra]

@Happygirl1This is from the IRS and Turbo Tax:

What do I need to do to claim the new unemployment relief?

If you’ve already filed your return, you should not  do anything. The IRS will re figure your taxes and send any refund amount directly to you. We will update with more details as they become available.

If you have not filed your 2020 tax return, yet, the Turbo Tax product will guide you on how to claim these additional unemployment benefits. 

[emmat92]

I am NOT trying to ammend.  I was going to that page to see what it had to say.  And at the top it showed my refund instead of what I owe that is on the tax return.

I know not to ammend.

[wfilbra]

@emmat92Sorry Enmat My comment was not directed at you. But, did you check your schedule 1 Line 8 and see if it showed the exclusion?

[syoung123]

someone gave me the following link which says the taxable social security calculation excludes the unemployment tax relief. 

"https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/unemployment-exclusion...

[emmat92]

That change was not on the home page.

You had to click amend and you will see the change in green at the top of that page.

[wfilbra]

@emmat92I'm not trying to be dense but are you using the online version or the cd/desktop version? I'm not sure where I find amend. I'm using the CD version.

[nytovjo]

TurvoTax  did update today but I don't think that it addressed all of the provisions of the American Rescue Plan.  My daughter works in theater and has been unemployed since last year due to the pandemic.  Her tax hit before the update was almost $1900, $1300 of which consisted of repayment of excess tax subsidies she received for her health insurance plan purchased from her state exchange. While the update did deduct the $10,200 from her taxable unemployment benefits, it did not address the health plan tax subsidies. This is from a summary of the bill's provisions: "Recognizing that the pandemic caused greater-than-usual economic disruption and uncertainty in 2020, the ARP waives repayment of any excess premium tax credit received by marketplace participants during that year."  TT did not do this and the subsidy overpayment was still included in her return although her tax liability is now under$500.  TT needs and additional update to address this.

[joeer77]

My update came through today. Looks like it worked as my return increased $2,000. Thanks TurboTax. 

[wfilbra]

@nytovjoCould this be because she purchased it through the state exchange and not the Federal marketplace. Don't know, just a thought. Also, not saying this has or has not been updated yet.

[clancy0108]

Thanks for picking up on this.  I saw it too.

[andytnguyensbcglobalnet]

When I was ready to complete my return (03/24/2021), Turbotax stated the software has not been updated to reflect the Unemployment Tax Relief and I have the option of filing my taxes now or wait until the software is updated. I opted to wait for the software to be updated. When should  expect the software to be updated?

[Thiswomanworks]

I was able to apply the updates this morning. Relief!

[Taxman19]

I now believe that my earlier post may have been incorrect.  This is due to the fact that the computation of taxable SS benefits in Sec 86  of the IRC is based upon a modified AGI amount that is determined without the benefit of the $10,200 exclusion set forth in new Sec. 85(c).  It would appear that TT's SS benefit worksheet is incorrect on Line 3 when it states to include amount from Schedule 1, Line 9, which is after the UC exclusion.  The IRC provides that the modified AGI is determined without the UC exclusion.  Therefore, you would need to add back the exclusion amount to the amount from Schedule 1, Line 9.

[Taxman19]

This is what TT actually does.

[wfilbra]

@andytnguyensbcglobalnetIt is updated. Make sure the software is closed and then open it. Accept updates to the software. The $10200 (or Less) exclusion should be there if you had $10200 available to be excluded or any unemployment amount below that. Check your Forms Schedule 1 Line 8 to see if it shows the exclusion.