TurboTax update to 2021 American Rescue Plan

[ReneeM7122]

You are correct, the American rescue plan excludes taxes for the first $10,200.00 of unemployment benefits, and TurboTax has been updated to reflect that.

Here is a TurboTax article about the American Rescue Plan.

The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021.  If anything else that affects you does not seem to be working just yet in the software, 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.

@Oii

[ReneeM7122]

Yes, you are right, some aspects of the software are still being developed while TurboTax works with the IRS and receives guidance from them.

The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021. Additional information 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 worksheets for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report things affected by the American Rescue Plan on their 2020 tax return.

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

Here is a TurboTax article about the American Rescue Plan

@maximgt

[xmasbaby0]

@maximgt The CD/download software has not been updated for unemployment yet.   They say it will update sometime on 3-26-21.    Only online TT has been updated for unemployment so far.

[ossysprog]

Last week TT said it was coming 3/19.  

[aalaniz]

My daughter's tax report is showing she can get additional tax relief for the American Rescue Plan because of unemployment. She has been given two options "Continue to File" or "I'll Wait to File". We have used the update feature before but when we update it shows as Updated.

[ErnieS0]

@aalaniz TurboTax Online has been updated for the exemption of the first $10,200 of income from unemployment. We are still waiting for TurboTax CD\Desktop updates.

If your daughter is using TurboTax Online, preview the 1040 before filing to make sure the subtraction is there. If it's not, delete the unemployment and re-enter the information.

• Click Tax Tools in the left column.
• Click Tools.
• Select View Tax Summary in the center.
• Go back to the left column. Select Preview my 1040.
• Form 1040 will display. Use the slider bar to the right of the form to move up and down.
• When you are finished viewing, go back to the left column and select Back.

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.

Related Resource:

• New Exclusion of up to $10,200 of Unemployment Compensation

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[fawilson]

Can SOMEONE from Turbotax please inform the customers: when will Turbotax be updated to reflect the new tax provisions in the American Rescue Plan Act? I would've thought TT had these ready to go in the event it passed.

[fawilson]

Would you advise that I just take away $10,200 from my unemployment or wait for the added IRS Tax Form?  This deduction from my unemployment will increase my refund.

[aalaniz]

Thank you for the quick advise and reply. Yeah we use the download version so I will have her wait till March 26th for the updates.

[craveking]

I can't preview my 1040 because I still have not paid for TT. I can see my tax summary and it's not hard to figure out if the UI income exemption has been implemented. But I cannot view individual forms and I'm not going to pay until I know the software has been updated with the premium tax credit as well. Maybe there some trick to seeing individual forms before you pay but I haven't figured it out.

[KrisD15]

Yes you can. 

When you click "View Tax Summary" ON THE LEFT-SIDE BAR "Preview My 1040" appears. 

Click "View my 1040" on the LEFT side-bar (in the dark gray area) 

[craveking]

Thanks! You are absolutely correct.

[KrisD15]

The unemployment will be listed on Schedule 1 line 7 and the subtraction is on Schedule 1 line 8. 

 

[bperry04]

Should I go ahead and file or wait for the ARP to take affect.  If I have already filed will the IRS Notify me?

[KrisD15]

If you haven't filed and can wait a bit, you should do that. 

The tax on unemployment has been updated for TurboTax Online. 

Still working on states and TurboTax desktop.