I withheld 10% for taxes, but was hit with drastic change on my return after entering all income sources. Same percentage of taxes taken from W-2 work, but my refund went negative after entering UI. The math makes it seem like I didn't pay ANY taxes on my unemployment, so wondering if it's asking for what I received (after withholding) or the gross unemployment amount (before withholding).
You will enter your GROSS Unemployment Benefits.
Keep in mind that the new legislation from the American Rescue Plan excludes from income up to $10,200 of unemployment compensation paid in 2020; if your modified adjusted gross income (AGI) is less than $150,000.
https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation
However, only certain states allow the same benefit. Other states consider that income taxable.
Thanks for that. Entering gross amount makes sense, but after I do add gross amount, my tax payment goes up as if I didn't pay ANY taxes on my unemployment income, even though I withheld 10%.
Very aggravating, as I suspect my unemployment, along with my wife's income has pushed our tax rate higher.