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

[DoninGA]

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@ADomenico16 wrote:

It's been signed into law. When will turbotax update this? I paid taxes on all of my unemployment. This tax exemption will most likely make me pay less.

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See this TurboTax support FAQ for information for the unemployment compensation exclusion - https://ttlc.intuit.com/community/tax-topics/help/how-do-i-claim-the-new-unemployment-benefits-in-tu...

Also see this IRS statement - https://www.irs.gov/newsroom/irs-statement-american-rescue-plan-act-of-2021

[billspurlock]

this is NOT still being debated, it was signed? When will turbotax make changes to the software that correctly calculate this? I cannot file my taxes until you get your stuff straight......

[billspurlock]

that's dumb and not true. this takes effect in 2020. TT is dragging their feet making the change so people have to amend their taxes and pay you again. Sickening. 

[VolvoGirl]

The president just signed it Friday.  See this March 15th post by a Turbo Tax employee with a link to sign up for updates

https://ttlc.intuit.com/community/taxes/discussion/can-i-take-the-new-10-200-00-unemployment-tax-cre...

[VolvoGirl]

And amending is free.

[billspurlock]

you know it won't. They want you to have to amend your taxes and pay again. 

[billspurlock]

not for me. Not if you buy the 200 dollar home and business tax software. 

[Critter-3]

AMENDING USING THE TT PROGRAM IS ALWAYS  FREE  UNLESS YOU MUST UPGRADE TO HANDLE A SITUATION YOU DID NOT HAVE ON THE ORIGINAL RETURN  LIKE IF YOU ADD A SCH   C  OR  D. 

Now my professional program will be updating to accept the unemployment change in the next couple of days for those who have NOT YET filed.  For those who have already filed the IRS still says to wait for further instructions.  

[VolvoGirl]

And definitely free if you used the Desktop CD/Download program.  Where are you seeing pay to amend?

[fanfare]

regarding the link above on procedures/forms-publications.

I wonder if the guidance will be rescinded.
It changes your AGI and I don't think that was the intent of the law.

[sammy_corey]

I dont know why you keep telling people 2021 legislation will not affect your 2020 taxes. You are wrong.

I googled Exempt Unemployment 2020 I copied and pasted the first line that popped up just for you.

Biden 2021 American Rescue Plan With Third Stimulus Checks and Unemployment Benefits Extension

Up to $10, 200 of 2020 unemployment will be tax exempt.

[nellie01]

it's the law now...when will see it in turbo tax?

[ericyister]

How do I deduct $10,200 from unemployment income received in 2020? My wife was unemployed and she collected a total of $18,446 in unemployment. Should I report just $8246 (i.e. $18,446 - $10,200 = $8246) or will TurboTax software will be updated to reflect this latest change - as Per the American Rescue Plan enacted on March 11, 2021. 

[nellie01]

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.

The exclusion should be reported separately from your unemployment compensation. See the updated instructions and the Unemployment Compensation Exclusion Worksheet to figure your exclusion and the amount to enter on Schedule 1, lines 7 and 8. 

The instructions for Schedule 1 (Form 1040), line 7, Unemployment Compensation, are updated to read as follows.

[sammy_corey]

Who knows!? I finished my taxes but I am going to wait to file.  The Bill just passed so its up to Intuit Turbotax to add it into their software now. It shouldn't be difficult for them to get their program to ignore the first $10,200 in Unemployment. So waiting a couple more weeks wont make any difference to me but I will file before April no matter what.