When will the $10,200 of unemployment tax exemption go into effect?

[DoninGA]

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@blaing wrote:

Situation: I filed my 2020 taxes before the American Tax Act. I owed taxes and set up to pay the taxes on April 15th via the TurboTax download version. I included over $10,200 in unemployment income. 

Based on what I read, the IRS will recalculate my 2020 Taxes and issue a refund sometime in May. 

My questions: Will my April 15th payment set up in TurboTax still be made?  Can I access somewhere to change the date? 

Thank you for any help, 

Bill

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If you choose to cancel your payment for the federal taxes owed and then make other arrangements to pay any taxes owed at a later date you can do so.  However, the due date for any federal taxes owed is May 17, 2021.

Go to this IRS website for how to cancel a federal tax payment - https://www.irs.gov/payments/pay-taxes-by-electronic-funds-withdrawal

• Once your return is accepted, information pertaining to your payment, such as account information, payment date, or amount, cannot be changed. If changes are needed, the only option is to cancel the payment and choose another payment method.
• Call IRS e-file Payment Services 24/7 at 1-888-353-4537 to inquire about or cancel your payment, but please wait 7 to 10 days after your return was accepted before calling.
• Cancellation requests must be received no later than 11:59 p.m. ET two business days prior to the scheduled payment date.

To pay any federal taxes owed on or before May 17, 2021 go to this IRS payment website and use Direct Pay - 

https://www.irs.gov/payments

[maestrowork]

Once the IRS accepted your returns (did you e-file or paper file?), you can't change it...  but apparently you can cancel your payment and choose another payment method. Still, you can't change it (so you initial payment still needs to go out before May 17) because the IRS has already accepted your returns.

[blaing]

Thank you for your response. I thought it might be that way. My guess is it will work out as an overpayment and show up in the May recalculation. Fingers crossed. 

[Critter-3]

@maestrowork 

A direct DEPOSIT cannot be changed after filing  HOWEVER direct DEBITS  can be CANCELED ... directly from the IRS : 

If you choose to cancel your payment for the federal taxes owed and then make other arrangements to pay any taxes owed at a later date you can do so.  However, the due date for any federal taxes owed is May 17, 2021.

Go to this IRS website for how to cancel a federal tax payment - https://www.irs.gov/payments/pay-taxes-by-electronic-funds-withdrawal

• Once your return is accepted, information pertaining to your payment, such as account information, payment date, or amount, cannot be changed. If changes are needed, the only option is to cancel the payment and choose another payment method.
• Call IRS e-file Payment Services 24/7 at 1-888-353-4537 to inquire about or cancel your payment, but please wait 7 to 10 days after your return was accepted before calling.
• Cancellation requests must be received no later than 11:59 p.m. ET two business days prior to the scheduled payment date.

To pay any federal taxes owed on or before May 17, 2021 go to this IRS payment website and use Direct Pay - 

https://www.irs.gov/payments

[maestrowork]

Yes, that's why the IRS extended to May 17.   Once they do the calculation, your originally-owed amount will be included in the overpayment, and will be added to your new refund amount. So if originally you owe $1000 and now you have a refund of $500, your final refund would be $1500 (unless the IRS finds other errors etc.) you will get a letter in the mail about the adjustments made to your tax returns.

[amt2020]

You can definitely cancel a payment that was scheduled when you e-filed, but you must do it at least 2 days before it was supposed to be paid and 7 or more days after filing.

I filed early and owed over $1,200 but after the $10,200 unemployment exemption was passed, I will only owe a little bit over $100, so I cancelled my payment that was scheduled for April 15th and now when I look at my balance due in my IRS account for the 2020 tax year, it gives me this message:

Your Information Is Not Available at This Time

If you requested an adjustment to your account your information will not be available until that transaction is complete.

So, I have my fingers crossed that they'll get it recalculated before May 17th.

[maestrowork]

You're required to pay any tax due by May 17.  Otherwise, you will incur penalties, etc. even if they later re-calculate and figure you owe less. But even then, you basically are late paying your tax due because you canceled payment.

[amt2020]

Since the tax due date was changed and a new tax exemption was passed after my initial filing, I'm gonna wait this out until like 1 day prior to May 17th and see if the new balance due amount shows up in my account information on the IRS website.

[maestrowork]

don't worry about him, he [removed]

[maestrowork]

not a bad strategy. but make sure you have enough time to pay so you don't incur penalties.

[tmarsha0]

Another Situation: I filed my Federal taxes a few weeks ago and I owe taxes. I waited a few weeks to file my state taxes and now TT is calculating the $10,200 deduction as part of my AGI. When I go to to file state taxes it uses the adjusted-AGI with the unemployment benefit exemption.

Is this acceptable to apply the federal exclusion on my state return even though federal taxes have already been filed? I am in Ohio.

[ltursi]

Well they created a worksheet to do just that. They want you not to put it under unemployment but in other income but turbotax do not allow you to put "UCE 10200" that they want to see on schedule 1 line 8 on the dotted line and the amount you would be taxed on. They have not updated there software and looks like they are not going to do anything.

[rcfran]

Just wanted to inform everyone that TurboTax online has officially updated the North Carolina returns to conform to their treatment of unemployment compensation and I was able to file both my Federal and State returns with no issues and both were accepted last night!

[maestrowork]

not sure what  you meant. Looking at my TT and returns, they did just that -- updated the software to do exactly the right thing.  You do NOT subtract the 10,200 directly from your UE, so on line 7 (1040) the full amount of UE is supposed to be reported, and then in Schedule 1, line 8, that's where you report the UCE.    The software updated the worksheet to include an Unemployment worksheet that feeds to Sch 1 line 8.  That negative "Other Income" would also flow to your state return (but it depends on what your state does with it -- in California, that is balanced out since UE is not taxable at all in CA).  So this is exactly what the IRS instructed to do:  report the full amount of Unemployment benefits on line 7, then add the negative UCE to Other Income.   The software has been updated accordingly to do just that.

[ltursi]

Has turbotax updated new york state as I do not see it and i just did an update. thanks