If I received unemployment part of the year, do I file it differently than the "W2"?

[GeoffreyG]

Yes, unemployment compensation is reported on your tax return differently than, and separately from, W-2 wage income.  While the tax rate is identical (that is, a dollar of wages faces the same income tax rate as does a dollar of unemployment benefits) they are not identical items.  Therefore they must be entered into the TurboTax software differently.

For wages, you should receive a W-2 from your employer or employers.

For unemployment compensation benefits, you should probably receive a Form 1099-G from your state government.  If you have not received one of these statements yet (1099-G) then you likely will shortly.  Also, you can call your state unemployment insurance office and ask them to send you one, or to send a replacement.

In TurboTax, entering state unemployment from a 1099-G is pretty simple.  Just follow these mechanical instructions:

1. Open your tax return in TurboTax online.
   (To do this, sign in to TurboTax, see your Tax Timeline, and click, ‘Take me to my return.’)
2. Using the Search feature in the upper right corner of the screen, enter 'unemployment compensation' and perform the search. Then click on the “Jump to” link, which is the first item in the search results.
3. On the Unemployment (and Paid Family Leave) screen, answer Yes and click Continue.
4. Follow the onscreen instructions to enter your 1099-G information.

However, if you don't think that you'll be getting a 1099-G from your state government, because your unemployment compensation was paid through another source, such as a private union, then please refer to the following webpage for further details, and instructions:

https://ttlc.intuit.com/questions/3277188-how-do-i-report-unemployment-if-i-didn-t-get-a-1099-g

Thanks for asking this important question.

[Carlareep]

Are you suppose to file unemployment that you recieved, Do they have to send them out by the 31 st of January 

[JohnW222]

Form 1099-G, on which your unemployment compensation is reported, must be mailed on or before January 31st.

[DeputyDawgAtl]

I'm using the desktop version.  Looks like there is a section for "unemployment" under federal tase/wages & income.

I didnt get a 1099-G via mail. The online version doesn't seem to be the same as what I'm being prompted for.

IRS article says im not taxed on the first $10,300: https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation - which says:

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. If you file Form 1040-NR, you can’t exclude any unemployment compensation for your spouse.

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, line 8.  

When figuring the following deductions or exclusions from income, if you are asked to enter an amount from Schedule 1, line 7 enter the total amount of unemployment compensation reported on line 7 (unreduced by any exclusion amount) and if you are asked to enter an amount from Schedule 1, line 8, enter the amount from line 3 of the Unemployment Compensation Exclusion Worksheet. See the specific form or instructions for more information. If you file Form 1040-NR, you aren’t eligible for all of these deductions. See the Instructions for Form 1040-NR for details.

 I made 17K.  I put the whole 17k in.  Does Turbo tax know to only tax me on the difference?   Is there a worksheet I can see to confirm all this.   I dont see an unemployment worksheet in the forms within TT

I just found schedule 1 which shows the $17k.  But I don't see how

Thanks

[KrisD15]

Could you clarify which tax year return you are working on?

The instructions you are quoting are for 2020 Tax Year.

Most of us are working on our 2021 Tax Year return and the unemployment income exclusion is for 2020 only. 

[DeputyDawgAtl]

My apologies... I did not catch this.

2021.  

Should I open a new thread?

[DianeW777]

No, it's not necessary to open a new thread.  The deduction for unemployment compensation you quote is for the tax year 2020.  There is no reduction in the amount of unemployment income you will report and include for 2021.  Enter your Form 1099-G and include the full amount of Box 1, of $17,000. It is fully taxable for 2021.

@DeputyDawgAtl

[DeputyDawgAtl]

Thanks, but what about that IRS article that states as of March 2021 only taxable for first $10,200.  My AGI is well below 150K

https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation

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. If you file Form 1040-NR, you can’t exclude any unemployment compensation for your spouse.

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, line 8.  

[Vanessa A]

The exclusion only applied to tax year 2020. Unemployment received in 2021 is fully taxable with no exclusions.