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

[spdev25]

Premier and Home and Business has not been updated to include the Unemployment adjustment.  We were promised on 18th, but they have not updated this portion yet.  My app also says updated and does not have the Unemployment issue resolved.

[kaitybyrd]

To the best of my knowledge, the desktop software has not been updated. I’m not sure where the March 25 date came from. I have Home & Business and am frustrated that I can’t file for my now significant refund!

[chapinreyes]

Yes it looks like we are all in a similar situation and just waiting for the update to be available.

[svg214]

I am using Turbo Tax Deluxe and as of early this morning, the update was not yet in mine.

Also, my daughter is affected by both the Unemployment tax and Unemployment changing her income level so the marketplace health insurance changes resulting in not enough tax withheld and a penalty.  She was expecting to owe, but not expecting a penalty to owe.   Is this reflected in the recent legislation and if so, is or will this be addressed in said Turbo Tax update?

[irunlikeataxgurl]

@svg214 

The American Rescue Plan Act removed penalties for miscalculation of the marketplace subsidy for 2020 only.

[Tony-In-Chicago]

Peggy,

We are all waiting for TurboTax to update their software.  TurboTax will NOT allow you to manually edit your 1040- schedule 1 – Line 8 section without returning an error if you override.

I believe TurboTax has fixed this issue for their online filers, and professional account users (CPA accountants).

Those of us who purchased the more expensive version of TurboTax have to wait for patches that may come on the 26th of this month…

Like yourself, trusting that the deduction will automatically be applied to your account is a little scary if you choose to submit it in its current state to the IRS.

If you discover something new, please feel free to share your experiences here…

[Phil_tax]

I'm using Turbotax on my desktop. I have checked for updates, seems to be the latest version. I still see unemployment on 1040 line 8. It is still included in taxable income, line 15. I don't see where the tax on this is subtracted yet. Any help?

[macuser_22]

It will be in the 3/25 update.

[NLS]

I called Turbo Tax twice tonight , got the answer that the updates for all software was completed on 3/19/21

When I do my taxes with the unemployment the amount goes to line 7 on schedule 1 but there is no credit in line 8 (which is what I was told should happen by this forum and by these two tax "experts" on the help line.  

So even though the income is showing the unemployment, the tax calculation refunded me the Federal withholding.   I asked Turbotax to escalate this issue (not holding my breath)  but the outcome is what I need, no taxes on the unemployment even if it's not looking as everything thinks it should

[NLS]

me too, I called turbo tax twice tonight they both said there should be a credit on line 8 to offset line 7 for unemployment on schedule 1  up to the 10,200 limit. It doesn't show up that way and is n your Income line on 1040

however under the tax calculations on the 1040 I do see the federal withholding being refunded from my 1099G 

[macuser_22]

The ONLINE version has been updated.  The desktop version updates, that each user must apply, will be available on Thursday 3/25 late afternoon per TurboTax.

[maestrowork]

Yes, the IRS always make adjustments if there are errors, and they will send you a new statement/bill.  I have never gotten a "refund" because of my errors, but it can happen.  The IRS "fixes" my returns at least five times in the past... I usually end up owing more money.

They have their internal systems to cross check and recalculate your taxes based on the data in your tax returns as well as data they have (e.g. your W2s, your investments, etc.) the IRS knows!   In this case, they would just change it based on your filed returns instead of asking you to file an amendment, since they know exactly what to change (by giving you the -$10,200 credit). You only need to file an amendment if there are things the IRS doesn't know.

[NLS]

Just curious how you know this date?

[ToddL99]

The exemption has already gone into effect; the only issue is how it will get implemented.

If you already filed and did not claim the exemption for unemployment compensation, the IRS will refigure your taxes for you and send any refund that is due.

From the IRS: New Exclusion of up to $10,200 of Unemployment Compensation:  

If you have already filed your 2020 Form 1040 or 1040-SR, there is no need to file an amended return (Form 1040-X) to figure the amount of unemployment compensation to exclude. The IRS will refigure your taxes using the excluded unemployment compensation amount and adjust your account accordingly. The IRS will send any refund amount directly to you.

If you have not filed yet, TurboTax online products have been updated to account for the unemployment exemption. We are working on incorporating the changes to TurboTax CD/DOWNLOAD as quickly as we can.  

You can sign up here to receive an email notification when it has been completed. 

[txmet]

Employee Tax Expert ToddL99 Employee Tax Expert 

If you have not filed yet, TurboTax online products have been updated to account for the unemployment exemption. We are working on incorporating the changes to TurboTax CD/DOWNLOAD as quickly as we can.

Does this mean it will not be in the regular scheduled desktop update of 3/25.  Since NO one that works for Turbotax has provided a DATE as to when the Federal portion will be update for those that paid for this software