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

[maestrowork]

It is fair to say that they don't know. It's not likely that would have an update in the next few days. I understand that it is relatively easier to update online version of the app than the desktop software. I think that's why the IRS has extended the deadline to 5.17 because the IRS has to give specific instructions and the desktop software is so much more complicated than the online app.  My $0.02.

[Fiscal]

The Desktop version may be more complex than the online app, but I prefer to keep all my personal information in my "C" drive rather than stored in the TT Servers...who knows where their server are located and who can access them. 

[Critter-3]

Just FYI ... my professional program had issues with the latest update from the IRS ... the fix caused 2 other issues so sometimes it is not just a simple fix for downloaded software.  Patience is needed by all during this time of  craziness. 

[maestrowork]

Of course. I do the same. I have been using Desktop version since 2008. This is just to explain why the online version was updated first, and it will take a while longer for the desktop version. I am not trying to tell you to go with online.  The Desktop updates will come.  It is only March 24.

My suggestion is, as I did it myself, finish your taxes now, including entering the correct 1099-G. When the updates are available, your returns will be automatically adjusted and DONE. No need to stress out right now about when the Desktop updates will be available.  It will be.

[Fiscal]

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[blandinisr]

Just to add to the overall confusion w.r.t 2020 Unemployment Income Tax Exemption of $10,200 - this was just published by Motley Fool today adding more to the confusion - we will have to see what TT actually implements as to whether or not a 2020 Tax filer's overall UI is excluded from Adjusted Gross Income or just the $10,200 as to determining the $150,000 threshold for Married Joint filers ?

• the Ascent > Personal Finance 

The IRS Just Made More People Eligible for an Unemployment Benefit Tax Break

by Maurie Backman March 24, 2021

Excerpt >

Unemployment income won't count as income

Originally, any jobless benefits that were collected in 2020 were counted for income purposes. So, if someone earned $140,000 from a job and another $14,000 in unemployment that person would be over the $150,000 limit and wouldn't get the aforementioned tax exemption. Now, the IRS says that jobless workers don't have to count their unemployment benefits when calculating their 2020 income. And this change could help more people fall below the $150,000 threshold to enjoy tax-free treatment of $10,200 in unemployment benefits.

regards,

[WS3RD]

I filled out all of my Federal information last week, and but did not hit "FILE" at the end, because I knew the situation was up in the air with the $10,200 deduction.

Today (3/24/21 at 2:30pm), I logged in, and revisited my work, and see nothing new about deducting the $10,200.  I am using the TT online version.  Must I totally clear my work and begin again?  Is there a refresh option or update option to get any changes to take effect?   

[changfayang1538]

I saw the online software has been updated for the $10,200 umemployment compensation. But I bought a CD/download two weeks ago, when will the CD/doanloaded versino will be updated?

Thank you. 

CY

[pjbusuito]

That seems to work!

[MichelleLO]

The CD/Download software has not been updated just yet. You can sign up for email notifications for the unemployment updates here

@pjbusuito

[maestrowork]

It's been suggested by HR Block to manually do that on 1040 -- I don't know how it is going to work by doing it this way in TurboTax. Also, if you do that, when the software does update, you will have to back out all your changes.  I would rather just wait until the desktop software is updated.

[maestrowork]

yes, it can get complicated because of all the calculations, etc.  But most of us probably don't have anything to worry about unless the UI will put you over $150K (for couples) or $75K for individuals.

[dlmanges]

they passed the law when is the software going to be update?

10200  wife  10200 me  that will keep me from paying more taxes

[gloriah5200]

Unfortunately, IRS is still working on the details and getting it into their system and then once that happens, getting the info out to the software developers.

If you haven't filed you should hold off.  The software updates should be coming out soon.

The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021. Additional information about a new round of economic impact payments, including the unemployment benefit will be forthcoming.

The IRS strongly urges taxpayers not to file amended returns related to the new legislative provisions or take other unnecessary steps at this time. The IRS will provide taxpayers with additional guidance on those provisions that could affect their 2020 tax return, including the retroactive provision that makes the first $10,200 of 2020 unemployment benefits nontaxable.

TurboTax is developing the software required to process all of the new conditions.

Please refer to the following link for additional information:

Unemployment Exemption

[kbl1320]

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