Unemployment tax relief

[jburkeclan]

How do I handle a situation where a person gets unemployment and has taxes taken from it. And because of the unemployment tax relief bill the unemployment compensation that was paid (which is less than the 10,200) is no longer treated as income and they don't have any other compensation to cover the taxes they paid on the unemployment. Turbo Tax is not allowing the taxes to be filed as an efile because the taxes paid are more than the income received. 

[JamesG1]

Unemployment for a Single taxpayer was less than $10,200.  The Federal 1040 tax return will report $0 taxable income because there is no other income to report.

There was Federal withholding reported and the Federal 1040 tax return is reporting the full amount as a Federal refund.  Do I understand correctly?

You are not allowed to e-file?  What error messages are you receiving?  Is TurboTax not allowing you to file Federal or the state or both?  Please clarify.

Many states have not updated their software to accommodate the change in unemployment income which was made retroactive to January 1, 2020. 

[jburkeclan]

It says that "The tax withheld of $xxx as shown on Form 1040 is greater than or equal to $0, the sum of income". She didn't know that she probably would have been better off not having the taxes deducted on the unemployment. In this case she actually listened to her mother (who'd a thunk it). And because she has no income being reported she can't have any taxes paid on her return. Turbo Tax is saying that she can't file efile because of this issue. Should I file a traditional paper return or should we just accept that she paid this amount in taxes and she's not going to get the money back.

[ReneeM7122]

If you already filed your 2020 taxes, you don't need to do anything.  The IRS says that it will refund the taxes paid before the $10.200 exclusion took effect.

See this IRS link about unemployment and this TurboTax article.

@jburkeclan

[jburkeclan]

I haven't filed them yet. That's why I'm having this problem. Turbo Tax won't let me submit them through e-file. Is there a fix in Turbo Tax that I can make so that I can e-file?

[MarilynG1]

You can Efile a return with $0 taxable income.  She reported Unemployment Income, received the Exclusion, so had $0 Taxable Income. 

Make sure you enter the 1099-G as shown (don't subtract he exclusion; TurboTax does that for you).  The UI amount must be greater than the Tax amount when you enter the 1099-G. 

Click this link for more info on How to Enter a 1099-G for Unemployment or Paid Family Leave. 

She should get a Refund of any Federal Taxes she paid, plus the Recovery Rebate Credit (if she qualifes), or any other credits she qualifies for. 

[jburkeclan]

You are not listening to me.  I already know that I can file a $0 income tax return, that is not the problem. The 1099 G has the unemployment amount and the taxes she paid for Federal and State. I input all of the amounts and happily the unemployment is credited back on schedule 1 by the unemployment relief act (which I know that Turbo Tax does automatically) this causes $0 income. Now, how do I handle the taxes on the 1099 G? Turbo Tax will not allow me to e-file because she has taxes and no income.

[MarilynG1]

@jburkeclan There must be some other issue preventing you from Efiling; she should be able to Efile and get the tax withheld on her 1099-G included in her refund.

[kegallagher]

I am having this exact issue filing my federal taxes. Were you able to find a solution? Thanks!

[Irene2805]

You should be able to e-file with zero taxable income. 

You should call us and speak with an agent so that we can determine the issue.  TurboTax customer service/support does not have a single phone number but has many different phone numbers based on the type of platform used.  

1. Click on this link:  https://support.turbotax.intuit.com/contact/
2. Select your TurboTax platform.  
3. Ask your question / state your problem.  Do NOT use the word "refund' or you will get a phone number for tax refunds.
4. Click Submit.
5. On the next screen, choose the Call option and follow the instructions.  You will be given the approximate wait time.  

You'll get a toll-free number to a TurboTax expert who is specially-trained to handle your particular issue.

@jburkeclan

@kegallagher​​​​​​​

[JonWinegar]

I have the same issue. This is a glitch/error. Mine says my form 1040 has a value that is actually the value of the 1099G from unemployment.

To bad this company doesnt have people to talk to on the phone.