Software issue impacting state taxable income - unemployment compensation exclusion.

[conorodonnell]

My state taxes seemed to be under calculated for what I owe because they are basing my Virginia taxable income on my Federal AGI, which includes the -$10,200 for the Unemployment Compensation, but then TurboTax calculates my Virginia taxable income as Federal AGI minus the entirety of what I was paid in unemployment, since it isn't taxed in Virginia.

However, this is making my Virginia taxable income $10,200 lower than it should be because it is subtracting my total unemployment received from Federal AGI which is effectively double counting the unemployment compensation deduction for my state taxes.

Is this a software issue anyone else is dealing with?

[savafritts]

Turbotax says State of VA is ready to go.    But I believe the software is deducting $10,200 twice, once as a stand along amount and one as the total unemployment amount received.  

Turbotax:  Please check this out asap.

[savafritts]

Let me correct something.  On my return the software subtracted the entire unemployment amount Line 7 (as it should have) and then added $5,100 to each of the Age Deduction lines  Lines 4A and 4B  (we are Seniors and are filing and 1040SR.  Not sure if everyone has that issue, maybe it's just us seniors?)  Therefore our VA taxable Income dropped $10,200 and resulted in a much larger refund.   While that would be nice, I do not think it's correct.   

[LinaJ2020]

We are aware of the issue and it is being investigated. 

Virginia initially did not tax the unemployment compensation.  On Form 760, when he calculation starts with the Federal AGI, it creates double-counting of the $10,200 being deducted from the taxable income.  

[savafritts]

I have been in contact with a TurboTax CPA and we went over the State of VA form.  My difference came from lines 4A and 4B which is the Age Deduction calculation which is based on Federal Adjusted Gross income (which has been reduced by $10,200).  This Age deduction comes into play for taxpayers born on or between January 2, 1939 and January 1, 1956.  If you are within this age and are filing 1040-SR I believe calculations are correct even though it appears to be double counting the 10,200.  Make sense?  I suspect it's an unintentional result of this age deduction.  But as the cpa pointed out, Turbotax doesn't make the forms, the State of VA does and apparently has approved this.