Has turbotax updated the new federal tax relief calculations?

If you're referring to Unemployment Compensation, and you haven't filed a 2020 income tax return, we expect TurboTax to be updated sometime today, Friday, March 19, 2021, to include the new federal tax relief calculations to exclude $10,200 of unemployment compensation. Sometimes the software change happens at midnight so don't worry if you don't see it right away.

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If you have filed a 2020 income tax return: Per Bloomberg: The Internal Revenue Service will automatically process refunds for individuals who paid taxes on their unemployment benefits before Congress passed a law making those payments tax-free,  Commissioner Chuck Rettig said.

• The automatic refund will mean that many recipients of unemployment benefits who have already filed their returns for 2020 won’t have to take extra steps to reclaim the taxes they paid but no longer owe -- on as much as $10,200 of jobless benefits. Taxpayers who have yet to submit their returns also have an additional month, until May 17, to file this year.
• “Do not file an amended return at this time,” Rettig told a congressional panel on Thursday. “We believe that we will be able to handle this on our own. We believe that we will be able to automatically issue refunds associated with the $10,200.”

As part of the recently passed American Rescue Plan, the first $10,200 worth of unemployment payments are now tax-free for households with annual incomes less than $150,000. This expanded tax relief begins this year, starting for taxpayers filing returns after January 1, 2020.