Where do I take the 10,200 dollar deduction on my unemployment compensation from the new passed Covid bill?

[DoninGA]

Nothing has passed Congress or signed by the President so there has been no changes to the tax code.

The legislation only would affect a federal tax return.  The various states that tax unemployment compensation would have to make changes to their own tax codes and only if they so desire.

TurboTax nor any other tax preparation software company can do anything until After the IRS has written the rules and regulations after passage of legislation which changes the tax code.

[frownie56]

The law has passed and was signed by the president so where do you get to $10,200 deduction from unemployment? I've completed my federal taxes but have not filed and I would like to go back and apply that deduction. How do I do that?

[DoninGA]

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@frownie56 wrote:

The law has passed and was signed by the president so where do you get to $10,200 deduction from unemployment? I've completed my federal taxes but have not filed and I would like to go back and apply that deduction. How do I do that?

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After the legislation has passed Congress and after the President has signed the legislation and after the IRS has written the rules, regulations and procedures.  And after the IRS has changed any forms or schedules to accept the tax code changes.  And after the IRS has approved the changes in the TurboTax program that apply to the tax code changes, then it will be available for the users of the tax preparation software.

This can take anywhere from several weeks to several months before it becomes available.

See this TurboTax support FAQ for information on the American Rescue Plan - https://ttlc.intuit.com/community/tax-topics/help/how-will-the-stimulus-package-impact-me/00/1393859

[frownie56]

so, once all of the forms and approval, etc. of the $10,200 unemployment income

credit is completed with IRS and Turbotax, will my completed federal taxes be automatically updated on my completed but yet not filed federal tax form on the software or do I need to go back and redo everything?

[dawnb29]

Please Let me know where to take deduction from

[JohnB5677]

If you've filed your return, do not do anything yet.  If you haven't filed you should file as usual, and include the full amount of the 1099-g..

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.

For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return.

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

[frownie56]

Why would I go ahead and file now when I could wait until the software is updated and get the deduction? That doesn’t even make sense to tell me to go ahead and file now when I have about a month until it Has to be filed, and chances are they’ll extend the filing deadline anyhow

[DMarkM1]

If you received Unemployment benefits in 2020 you should wait for the software updates to complete your return.   

You can go here to sign up for notification of updates.  

[betty4251]

when will turbo tax update the unemployment tax exemption

[MayaD]

Once the IRS provides additional guidance, TurboTax will be updated to reflect these new tax laws relating to unemployment. 

If you haven’t filed your 2020 taxes yet and would like to receive progress status updates, please sign up here.