Tax Year 2020: TurboTax Updates on Unemployment Tax Relief

[Happygirl1]

Just got off the phone with Turbo Tax and nothing on my account has updated at all. She is trying to say there's a big update today at 1pm. I kind of feel as if she didn't know what she was talking about and just wanted off the phone. I do not have the tax tool option. My taxes still just showing accepted and fees pending even though I received my refund at the beginning of this month. 

[Bill0509]

Just opened TT Home and Business 3/26/21 at 10:16 am and the update completed and the unemployment exemption was completed. All is good here. 

[wfilbra]

You said you received your refund. Why are you trying to update Turbo Tax? I would guess Turbo Tax will not allow you to change a submitted return. At this point, the recommendation is to wait for the IRS to refund the difference for the returns that had Unemployment Income. Your other option would be to file an amended return, not an original changed return. I would'nt file an amended return yet or you may create a larger delay for yourself than if you had waited for the IRS to issue you an additional refund.

[Happygirl1]

Im not trying to amend. From my understanding TurboTax has updated the software to change the unemployment tax holding for those who have already filed and those who will be filing. Many people have logged into their homepage on TurboTax and shows the change...mine does not...

[Bill0509]

You are correct. Sorry that I was not clear. I had not filed the return. I understand the IRS does not want amended returns. After I updated TT when I launched it,  the Schedule 1 had the exemption amount in line 8 and there was a larger refund than yesterday. Thanks for thinking I was mistaken but I was just not clear. 

[Taxman19]

Be aware that although the software has been updated for the unemployment compensation exclusion of $10,200, there is another CD software glitch (this glitch may also impact the online software) if you have Social Security benefits.  On the SS benefits worksheet, Line 3 is an amount from numerous lines of the 1040, one of which is Schedule 1, Line 9.  Schedule 1 reflects the unemployment comp and the exclusion (Line 8).  The amount TT is picking up from Schedule 1, Line 9  does not reflect the exclusion of $10,200.  As a result, a greater portion of the SS benefits are being included in gross income.  I called TT and provided this information and they said that assuming I am correct, they will update the software next Friday.  If you do not want to wait, override the amount on Line 3 of the SS benefits worksheet to agree with Schedule 1, Line 9. It is also possible that other tax return computations could be impacted.

[wfilbra]

Happygirl1--The update is for those who have not filed. If you start a new return it will probably be there. You cannot file an additional 1040 return that has been changed. It would be rejected! The IRS is supposed to send additional refunds for those that have already filed with Unemployment compensation. You would need to file an amended return which is a 1040X. I would not recommend doing this as you will probably create more confusion that if you had waited for the IRS to send the additional refund.

[emmat92]

Mine tax returns seems to have been updated because I owed 871 now I get a refund of 333.

But I had to go to the ammend page to see that info.

[DoninGA]

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@Happygirl1 wrote:

Im not trying to amend. From my understanding TurboTax has updated the software to change the unemployment tax holding for those who have already filed and those who will be filing. Many people have logged into their homepage on TurboTax and shows the change...mine does not...

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If your 2020 Modified AGI is $150,000 or more you are not eligible for the exclusion.

What is shown on your Schedule 1 Line 8?

[Happygirl1]

AGI under $150K. Nothing in line 8 meaning it hasn't been updated yet.

[syoung123]

I just found the same issue that you said on the SS benefits worksheet.  How do you override the worksheet?

[esaud111]

Thanks for the update - I did not get an email from TT as promised.  I'll check mine now.

[Taxman19]

Highlight the amount on the SS benefit worksheet, Line 3.  This will bring up a box in which you click on Override and enter the correct amount.

[wfilbra]

@Taxman19  Is this true if the SS spouse had no UC and the Spouse with the UC is not on Social Security?

[wfilbra]

@Happygirl1Didn't you indicate that you received a refund? Why are you trying to amend an original return?