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Has TurboTax been updated to reflect that unemployment earnings are not taxed federally due to the new Covid bill that just passed?

Forum|Forum|5 years ago
March 15, 2021
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TurboTax Deluxe Online

Best answer by DianeW777

I agree, that post did not answer the question of "when will turbotax update their software?" I got an email from Turbotax yesterday claiming that they "had my back" concerning this new legislation. I assumed that meant that they had made the necessary changes to the software to reflect the new law. So I went ahead, updated the software and filed my taxes. I guess that is what I get for believing TurboTax advertising.

We must wait for IRS direction at their request. With this new law, if your household income is less than $150,000, the first $10,200 of unemployment will be tax-free, but any amount you receive above that will be taxed. We must wait on the IRS for the way they want this to be handled. Please continue to use the links below to know the most up to date information. If you already filed your tax return do NOT amend at this time per IRS.

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ee-ea

Employee

TurboTax can notify you when the IRS decides what they will do. https://ttlc.intuit.com/community/tax-topics/help/how-do-i-get-the-new-unemployment-benefits-if-i-ve-already-filed-my-taxes/00/2081053

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authenticroadkilAuthor

Thanks! But that’s for people who have already filed. Is it also not updated for those who haven’t filed yet?

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Tom1129

I agree, that post did not answer the question of "when will turbotax update their software?" I got an email from Turbotax yesterday claiming that they "had my back" concerning this new legislation. I assumed that meant that they had made the necessary changes to the software to reflect the new law. So I went ahead, updated the software and filed my taxes. I guess that is what I get for believing TurboTax advertising.

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reydelacruz12

I received a message regarding unemployment benefit first 10,200 not taxed, can I still amend the 17,000 submitted?

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DavidD66

Taxpayers only need to file an amended return if the recalculations make them newly eligible for additional federal tax credits or deductions not already included on their original tax return.

For taxpayers who already have filed and figured their 2020 tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation. Any resulting overpayment of tax will be either refunded or applied to other taxes owed.

The agency will do these recalculations in two phases.

First, taxpayers who are eligible to exclude up to $10,200.
Second, those married filing jointly who are eligible to exclude up to $20,400, and others with more complex returns.

Phase one will begin in May. A timeline for phase two has not yet been announced.

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