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Returning Member
posted Apr 12, 2022 11:45:50 AM

Why must I upgrade to deluxe to file a tax return with unemployment benefits when I did not have to last year?

I got unemployment benefits in 2020 and did not need TuboTax Deluxe to file. I lost my job in 2021 and got unemployment benefits, and now TurboTax is prompting me to upgrade to Deluxe. Why?

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7 Replies
Level 1
Apr 12, 2022 11:52:51 AM

Don't believe you need to upgrade just for unemployment.  They are always prompting offers to upgrade just to sell.  You should be able to report your unemployment benefits received per your 1099 without the upgrade.

Expert Alumni
Apr 12, 2022 12:07:32 PM

You can use the link below to see what is available to use for TurboTax Free.  It does look as though you need to upgrade to TurboTax Deluxe Online for unemployment income.  TurboTax CD/Download will allow unemployment in the Basic version.

@dat_phat_cat

Returning Member
Apr 12, 2022 12:12:19 PM

My screen states the following:

Based on your tax situation, you need to upgrade to TurboTax Deluxe
 
— Your current product —
Free Edition
Free Edition is only for simple tax returns.
You won't be able to report unemployment income or paid family leave benefits.

Required for your tax situation —
Deluxe
Deluxe covers unemployment income and paid family leave benefits, which is reported to the IRS on Schedule 1.


<Back    [This doesn't apply to me] [25% off Deluxe]

If I press "This doesn't apply to me" it just takes me back to the previous screen as if I haven't started my 1099-G unemployment benefits, and it shows the dollar amount from 2020's information.

Employee Tax Expert
Apr 12, 2022 12:31:29 PM

Unemployment compensation is reported on Schedule 1. Credits, deductions, and income reported on schedules 1–3 are not covered in TurboTax Free Edition. 

 

Because unemployment is not included in TurboTax Free Edition, the program is prompting you to upgrade to TurboTax Deluxe. TurboTax Deluxe includes the 1040 form with itemized deductions (Schedules 1–6, Schedule A and Schedule C income), along with everything in Free Edition and PLUS.

 

@dat_phat_cat

Returning Member
Apr 12, 2022 12:38:58 PM

Yep. I'm looking at my 2020 returns right now, and sure enough the Schedule 1 is included and has all the unemployment information. It was part of the Free Edition in 2020, and now in 2021 TurboTax is charging money for it, even though it's the SAME simple form and process as before.

Again, my question is why it's asking me to upgrade. It clearly isn't needed, since it was done for free last year.

Just checked on some other sites, and they are offering to do Federal and State with unemployment Schedule 1 for free. I guess I'll go check with them and see what happens.

Returning Member
Apr 12, 2022 3:55:33 PM

And I just got done e-filing my Federal and State tax returns WITH unemployment information included FOR FREE on H&R Block! TurboTax has no reason to charge almost $100 to e-file an easy return that it e-filed for FREE last year! I'll be sticking with H&R Block now, Turbo Tax. SEE YAAAAA!!!!!

New Member
Mar 20, 2025 8:14:37 AM

Who knows? Maybe predatory scheme by turbo tax so they can profit more on an extra that’s free in irs free file. The messed up thing is that you won’t even get a return for filing the taxes paid with unemployment. So it makes zero sense for them to make us upgrade to delux. Obvious scam by turbo tax. Consumer report? Maybe in the future.i have 10 years of filing with turbo tax but this year they lost me because of this. Can’t deduct turbo tax from last years tax prep either. Going back to paper. Takes ten minutes. Not sorry for the negative marketing. Year after year changing the policy to protect profits is bad business imo. Especially when you do it to broke people filing unemployment.