When will the $10,200 of unemployment tax exemption go into effect?

[mdaddy59]

No it is retroactive to 2020.

[auto]

Is there an update on this now that the bill is law? Does Turbotax incorporate the new calculation?

[Hal_Al]

The IRS has provided instructions. TT hasn't said when they'll be ready.  

https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemploym...

[Sbrown12123]

Nice, it shouldn't be too long for TT, as they have known for months that this was a possibility, and especially coming during mid tax season, I'm sure they put their efforts into a smooth update to their software to add that extra exemption. 

Patiently waiting and reading this thread.

[Critter-3]

They may have issued a worksheet for the paper filers however getting it incorporated into the program is another thing all together  especially that the PTC repayment is also being forgiven.  It could take some time for the electronic systems to be updated.  

From my professional program:     https://kb.drakesoftware.com/Site/Browse/17147/20210312-Broadcast-Unemployment-and-Premium-Tax-Credi...

[fbmcardl2]

@Critter-3Regardless, TT needs to speak up immediately telling customers what they are doing, estimated time frames for software updates, and advice on when to file an amended return if one has already filed.

[mickeylackey]

It is signed into laws now.  ALso was there something about sick leave being paid too?

[macuser_22]

---

@Sbrown12123 wrote:

Nice, it shouldn't be too long for TT, as they have known for months that this was a possibility, and especially coming during mid tax season, I'm sure they put their efforts into a smooth update to their software to add that extra exemption. 

Patiently waiting and reading this thread.

---

TurboTax has no idea how the IRS regulators will implement this,   A change to the 1040X? an entirely new form? some other method?  It is also possible that TurboTax won't need to do anything at all and the IRS could look at 2020 returns and just mail a check.

And you do not program tax software bases on the law , you must program using an IRS provided "schema" so what TurboTax sends to the IRS, the IRS can read and the IRS computer use the same schema.

That can take weeks to months.

[macuser_22]

---

@fbmcardl2 wrote:

@Critter-3Regardless, TT needs to speak up immediately telling customers what they are doing, estimated time frames for software updates, and advice on when to file an amended return if one has already filed.

---

TurboTax cannot do ANYTHING until the IRS says how they will implement it.

[amt2020]

---

@Hal_Al wrote:

The IRS has provided instructions. TT hasn't said when they'll be ready.  

https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemploym...

---

Thank you for providing that link. So it looks like in a simplified version of all those worksheet instructions, the $10,200 unemployment exemption will basically reduce the amount that gets entered on line 8 of form 1040, and everything else that is affected by that change will calculate out accordingly.

I guess now my question is more about how this change will affect my own situation. To recap: I already filed my taxes before knowing anything about this exemption and I owed over $1,000 which then triggered quarterly estimated tax payments for 2021 and I was charged a penalty for my 2020 taxes being so high.  Do any of you super helpful and experienced tax experts on this thread think that if it comes down to me filing an amended return once it is available, if the new outcome is that I now do not have to make estimated tax payments or pay a penalty, will that amended return completely supersede the original one I filed and become my "official" return with the IRS?  I guess I am worrying about there being conflicting returns in my name, first with quarterly estimated tax payments being due in 2021, and then an amended return without them, and will there be any problems if I don't send in the first estimated payment which my original return said was due on April 15th??

[fbmcardl2]

@ macuser. Totally disagree with your statement that TT can do absolutely nothing. See for example what Oregon is telling its taxpayers. The silence from TT is deafening. From Oregon Department of Revenue:

"The Oregon Department of Revenue recommends that affected taxpayers wait for further information from the IRS and the department before taking action. This includes those who have already filed their 2020 federal and state taxes and may need to file an amended return, as well as those who have yet to file.

Once the IRS determines the best way to address this unique change in law made in the middle of tax filing season, the department will offer more information to Oregon taxpayers via its website.

[macuser_22]

---

@amt2020 wrote:

---

@Hal_Al wrote:

The IRS has provided instructions. TT hasn't said when they'll be ready.  

https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemploym...

---

Thank you for providing that link. So it looks like in a simplified version of all those worksheet instructions, the $10,200 unemployment exemption will basically reduce the amount that gets entered on line 8 of form 1040, and everything else that is affected by that change will calculate out accordingly.

I guess now my question is more about how this change will affect my own situation. To recap: I already filed my taxes before knowing anything about this exemption and I owed over $1,000 which then triggered quarterly estimated tax payments for 2021 and I was charged a penalty for my 2020 taxes being so high.  Do any of you super helpful and experienced tax experts on this thread think that if it comes down to me filing an amended return once it is available, if the new outcome is that I now do not have to make estimated tax payments or pay a penalty, will that amended return completely supersede the original one I filed and become my "official" return with the IRS?  I guess I am worrying about there being conflicting returns in my name, first with quarterly estimated tax payments being due in 2021, and then an amended return without them, and will there be any problems if I don't send in the first estimated payment which my original return said was due on April 15th??

---

According to the IRS article, that would need to either be reported in the original tax return or an amended tax return, once it is incorporated into the software.

[txmet]

The irs has provided direction and it doesnt require a new form but does need coding im sure with step by step,  it doesnt look like major coding since irs is using existing lines. TT needs to provide an estimate shouldnt take more than a week for this part. (including testing)  i switched to turbtoax when h&r took over taxcut and destroyed it,  I may look for other options next year if TT continues to not provide udpates timely and more importantly fails to communicate timelines

[macuser_22]

---

@txmet wrote:

The irs has provided direction and it doesnt require a new form but does need coding im sure with step by step,  it doesnt look like major coding since irs is using existing lines. TT needs to provide an estimate shouldnt take more than a week for this part. (including testing)  i switched to turbtoax when h&r took over taxcut and destroyed it,  I may look for other options next year if TT continues to not provide udpates timely and more importantly fails to communicate timelines

---

I think longer then that since there are many other items in the update bucket.     Once an update is scheduled they do not often hold it to include other things that would require retesting the entire package.    I believe the next update is scheduled for March 25.

[Kelilloyd]

Now that POTUS has signed bill how much longer untill irs updated so that turbotax updates code?