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ConsDemo
Level 1

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

The American Rescue Plan Act that will be signed into law by President Biden today exempts the first $10,200 in unemployment benefits in 2020 from taxation.
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Accepted Solutions
JohnB5677
Expert Alumni

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

If you've filed your return, do not do anything yet.  If you haven't filed you should file as usual.

 

The IRS will issue guidance about what to do if you already filed.  Making part of your unemployment tax-free would increase your refund or reduce your tax. Wait until the IRS has issued the instructions before you do anything.

 

You will not get a new 1099-G. The 1099-G reports the full amount of unemployment benefits that were paid to you, whether or not it is all taxable. The 1099-G does not show how much of it is taxable or not taxable. Any adjustment of the taxable amount will be made on your federal tax return, or on an amended federal tax return, or by the IRS.

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doctorswat
New Member

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

Advising a taxpayer with now overstated taxable unemployment compensation to file their return as usual seems to be inappropriate.  They would be leaving, on average, about $1,000 with the IRS until they can get around to filing a possible amended return.  Not terrible if it reduces a refund, but terrible if they file with a balance due and they have to lay it out.  Better to wait until 4/15 to file.  IRS may need to extend the filing deadline anyway given that pandemic related issues still exist.

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685 Replies
DavidD66
Employee Tax Expert

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

TurboTax will definitely be updating the software to reflect the changes in the American Rescue Plan, but there is no current timeline yet.  Changes will first have to be made by the IRS, and then tax software companies (like Intuit) will follow suit as soon as possible.  

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lkrob346
New Member

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

Will there be enough time for intuit to change the software for all the new tax changes American Rescue Plan Act of 2021 and to file our taxes on time by 4.15.21 ? 

JohnB5677
Expert Alumni

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

If you've filed your return, do not do anything yet.  If you haven't filed you should file as usual.

 

The IRS will issue guidance about what to do if you already filed.  Making part of your unemployment tax-free would increase your refund or reduce your tax. Wait until the IRS has issued the instructions before you do anything.

 

You will not get a new 1099-G. The 1099-G reports the full amount of unemployment benefits that were paid to you, whether or not it is all taxable. The 1099-G does not show how much of it is taxable or not taxable. Any adjustment of the taxable amount will be made on your federal tax return, or on an amended federal tax return, or by the IRS.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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Shaneh816
New Member

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

Will TurboTax be updating its software to include the provisions frim the American Rescue Plan before April 15th? 

Irene2805
Expert Alumni

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

We hope to but first we need to get the information from the IRS.  For more information please see this TurboTax Help article:  How will the third stimulus impact me?

natjosef
New Member

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

I have not filed my 2020 tax return yet. I received unemployment in 2020 and paid federal taxes on it. Should I wait to file until the IRS has given the info on the impact of the American Recovery Plan on the first $10,200? Or should I file now? Does it matter? Thanks!

doctorswat
New Member

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

Advising a taxpayer with now overstated taxable unemployment compensation to file their return as usual seems to be inappropriate.  They would be leaving, on average, about $1,000 with the IRS until they can get around to filing a possible amended return.  Not terrible if it reduces a refund, but terrible if they file with a balance due and they have to lay it out.  Better to wait until 4/15 to file.  IRS may need to extend the filing deadline anyway given that pandemic related issues still exist.

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dkingsbo
Level 3

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

I've been reading some of the most recent posts, the Tax preparation companies will have a resolution very shortly. 

 

 

 

gmr3
Level 1

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

I believe H&R Block has already updated their software. We may be filing with them this year if TurboTax cannot update their software in a timely fashion. 

dkingsbo
Level 3

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

Yes, I agree.  We can be certain that TurboTax will want to retain their taxpayer base. 

berms
New Member

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

Do you see any problem if we merely deduct $10,200 from the total unemployment compensation received and file ASAP to be in a position to receive the stimulus check a faster. 

macuser_22
Level 15

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?


@berms  wrote:

Do you see any problem if we merely deduct $10,200 from the total unemployment compensation received and file ASAP to be in a position to receive the stimulus check a faster. 


Yes.  It must be reported as the IRS specifies.

 

The $10,200 unemployment retroactive to 2020 was just signed into law. Now the IRS is responsible for writing regulations and rules for claiming it.

The IRS has released new instructions for reporting this that should not take very long to incorporate.

https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemploym...

 

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
berms
New Member

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

Thanks for the information.  Looks like the IRS has set forth a procedure for applying the  $10,200 reduction.   If so, what's taking Turbo tax so long to follow through with update.    May have to file with H & R block. 

janine1965
Level 1

Will Turbotax be updating it's software to account for the change in the taxation of unemployment benefits in 2020 and, if so, when?

It would be really nice if TurboTax at least let us know this is being worked on.  I submitted my taxes through them and owe quite a bit, so it would be nice to know if I should go ahead an amend, so I don't owe quite as much. 

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