When will Turbotax put Maryland's RELIEF act into effect and remove unemployment income from filers' FAGIs?

[gloriah5200]

There are two parts to the Maryland Relief Act concerning Unemployment benefits. 

1. The RELIEF Act provides $1,000 Unemployment Grants to 32,000 recipients. Questions about the Unemployment Grant should be directed to the Maryland Department of Labor, the agency that determines who will receive the grant.  The recipients of these grants will be selected by the Maryland Department of Labor and the recipients will receive a check in the mail as a result.
2. Unemployment Insurance Income Tax Subtraction-As follows:

Q: What is the Unemployment Insurance Benefits Income Tax Subtraction?

A: The RELIEF Act provides a State Income Tax Exemption for Unemployment Insurance (UI)Benefits for qualifying filers.

UI payments are currently subject to federal and state income taxation. Beginning with Tax Year 2020 and including Tax Year 2021, the Act exempts from the state income tax the UI benefits received by an individual earning less than $75,000, and couples filing jointly or individual heads of households earning less than $100,000.

Q: How can I claim the subtraction?

A: You may claim the subtraction on your 2020 and 2021 Maryland State Tax Return.

On the Comptroller of Maryland website, they are just now announcing that they will have revised 2020 forms available this week.  After they get the forms available, then they contact the software companies to determine what they need to do next.

The software developers cannot do anything until the taxing authorities gives them the instructions, updates the Maryland tax system, and approves the software changes after they have been completed in the software.

Unfortunately, the details are not yet available from MD nor the Comptroller's website.

We will update the software as soon as we are able.

[jirudayam]

Please let us know if TurboTax implemented this change for Maryland state.

[JaymzYzr]

The forms have now become available on the MD comptroller website. When will the changes be made on TurboTax? A week? Less than? Longer?

[Mollygirl123]

Does anyone know how to contact Intuit regarding this issue?  Someone there should update the user community as to an ETA.  That would be helpful !!!!

[Mollygirl123]

I just talked to a live support representative and she said according to her information the  Maryland Unemployment  Income Update will be made on Monday, April 26, 2021.

[yexler]

Has this been updated on the turbotax tax calculator ?

I just used it recently & it gave me an estimated federal refund.

I want to know if that includes the new provision of $10,000  unemployment benefit etc. not being taxed.

Thank You,

[Mollygirl123]

For the Federal return Turbo Tax includes the Unemployment Income exclusion.  The Maryland exclusion won’t be updated until April 26th.  According to my conversation this morning with Intuit support.

[vince88]

I entered all my info today to prepare for filing MD taxes and it is subtracting unemployment compensation in excess of $10,200 from MD taxable income. As far as I understand, this is the benefit of the tax changes.

So is this not already active in TurboTax? What other changes would we be waiting for on April 26?

[Mollygirl123]

Where are you seeing this in the Maryland return ? Also, did your program update before you entered your information? Maybe they did the update earlier than anticipated.

[Leon13]

Hello

I did my tax yesterday, and I reasized that Turbotax is updated because it gives me all the credit I am supposed to get.

Tt deduct $ 10 200 from my income on federal and state filling in Maryland, and I got all tax paid on unemployment. However, the system said that I didn't get all credit, so I didn't submit and saved all the info.

I will receive an email from them once everthing is done. To my experience, update is done. 

[vince88]

@Mollygirl123 I am not sure if there was an update as today was my first time using TurboTax this year. Under the MD return, there is a section for "Unemployment Compensation" and if you click into there, it leads to the "Maryland Benefits from Unemployment Compensation" page where there is a box to enter a subtraction. It automatically populated this box for me with the amount in excess of $10,200. Then that amount shows in the MD form 502LU line 4 and form 502 line 15. It subtracts that amount from MD total taxable income.

From my understanding, this is the benefit. Someone correct me if I am wrong. I believe it should be working then? The TurboTax user interface does not seem to be updated though. 

[Mollygirl123]

It's been updated.  I've been waiting many weeks since the Maryland law was changed.

You brought us all good luck !!!

[Litaxes1]

Hi, 

The Maryland Tax Alert (https://www.marylandtaxes.gov/RELIEFAct/docs/RELIEF_Act_Tax_Alert.pdf) indicates that unemployment compensation in excess of the $10,200 federal exclusion is eligible for subtraction at the Maryland level, for those within the income limit, which I am.  This is what my account currently shows, as of today (April 23)- seemingly the account uses a Maryland-Source Net Unemployment Compensation figure for this purpose, calculated by taking the total unemployment compensation income minus the $10,200.  However, this implies that I am still paying state unemployment taxes on the initial $10,200 of unemployment compensation (and simply subtracting those in excess of the $10,200).  But, on the website of the governor of Maryland (https://governor.maryland.gov/reliefact/) it says "The RELIEF Act will repeal all state and local income taxes on unemployment benefits for 2020."  The two premises directly contradict each other; so which is it?  Are we only subtracting state unemployment taxes beyond the $10,200, or have all state unemployment taxes been repealed?  And if state taxes on unemployment have been repealed, when will my account be updated?

[vince88]

The MD state taxes use the adjusted gross income figure from the federal taxes, which is calculated by already subtracting $10,200 from taxable income. So when it gets input into the MD form, that $10,200 is already accounted for. The excess of $10,200 is then subtracted from taxable income for MD to get a net zero taxed by MD state (so long as your income is below the single/joint thresholds).

This would fulfill what the Act says.

[Litaxes1]

I appreciate the response, but it doesn't quite answer my question, because, before the return was updated, it indicated that I was owed a state tax refund, and now that it is updated, it shows that the refund amount is less than the amount of state unemployment taxes that I have had withheld; if state taxes on unemployment are being repealed, the full amount of state unemployment tax that I had withheld over the course of the year should be refunded to me, plus whatever the state previously owed.

Could one of the Turbotax Tax Experts reply to this email, confirming what is going on, or if Vince88's explanation is correct?  My previous question was: 

The Maryland Tax Alert (https://www.marylandtaxes.gov/RELIEFAct/docs/RELIEF_Act_Tax_Alert.pdf) indicates that unemployment compensation in excess of the $10,200 federal exclusion is eligible for subtraction at the Maryland level, for those within the income limit, which I am.  This is what my account currently shows, as of today (April 23)- seemingly the account uses a Maryland-Source Net Unemployment Compensation figure for this purpose, calculated by taking the total unemployment compensation income minus the $10,200.  However, this implies that I am still paying state unemployment taxes on the initial $10,200 of unemployment compensation (and simply subtracting those in excess of the $10,200).  But, on the website of the governor of Maryland (https://governor.maryland.gov/reliefact/) it says "The RELIEF Act will repeal all state and local income taxes on unemployment benefits for 2020."  The two premises directly contradict each other; so which is it?  Are we only subtracting state unemployment taxes beyond the $10,200, or have all state unemployment taxes been repealed?  And if state taxes on unemployment have been repealed, when will my account be updated?