Question

Unemployment Compensation Exclusion Worksheet – Schedule 1, Line 8

Forum|Forum|5 years ago
March 19, 2021
3 replies
0 views

I read yesterday that a Turbotax spokeswomen said that this would be updated in the software the evening of March 18th. I do not see that this happened.

I

Irene2805

The adjustment to the taxable unemployment benefits will be on Schedule 1, line 8 of the 1040. TurboTax will guide you through the process.

If you haven't filed your tax return yet, we expect TurboTax to be updated later today (Friday, 3/19) to include the new federal tax relief calculations on unemployment benefits. [Releases are usually pushed later in the day.]

If you have already filed your return, the IRS has stressed to NOT amend at this time. We do not yet have updated guidance for those who have filed their returns. Please see this TurboTax Help article: How do I get the new unemployment benefits if I’ve already filed my taxes? It contains the latest information and contains a link for you to sign up to be notified when changes occur.

P

patobr55Author

I have not filed my return yet and my Turbotax premier verson was updated last on 03/18/21. It says it is up to date and it does not have the Unemployment exemption worksheet and does not exempt the $10200. When will this update be pushed out I need my refund

K

Kim-C

As of 03/20/2021, it has not updated in my Turbo Tax, but it is updated in the Intuit Pro Series Basic. When is this really going to be updated?

S

Steve1044

It would seem that he exclusion can be accomplished by using the IRS worksheet at https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemployment-compensation

and entering the resulting "UCE" on line 22 on Other Income form in Turbotax. I am waiting for Turbotax to confirm or procedurally generate this exclusion before going any further

S

Steve1044

Unfortunately this approach will not work since the IRS has now said "When figuring any of the following deductions or exclusions, include the full amount of your unemployment benefits reported on Schedule 1, line 7 (unreduced by any exclusion amount): taxable social security benefits, ...." Simply deducting the 10200 from UI will reduce the taxable social security benefit amount....

Just as a side note, just deducting the 10200 from UI also reduces Modified Adjusted Gross Income on Form 8962 calculating Premium Tax Credit. There are a LOT of flow through implications here.

G

gloriah5200

No, you are correct. You must enter the full amount of unemployment income reported on the 1099-G and received on the return line 7 in the input of the 1099-G for unemployment income. It flows from there to other calculations in the software and to the state returns.

J

JEFFCT

Sometime on March 26th, TT updated its software (Home / Biz desktop ver) for the Unemployment Compensation Exclusion, however, the print outs do not include the new IRS Exclusion Worksheet. Furthermore, the Taxable Social Security Worksheet, which uses the Modified Adjusted Gross Income is not taking into consideration the reduction in income due to the exclusion thereby taxing my Social Security for the full unemployment contrary to the act. IRS instructions are very clear and TT is not following them, most likely by not following the instructions for the Unemployment Compensation Exclusion Worksheet.

B

bradenleg100

I filed my taxes on 3/2 and qualified for an $11,300 Premium Tax Credit for 2020 and my total refund was $14,600. On 3/25, i went into my Turbo Tax account and my refund was reduced to $3300 and my Premium Tax Credit was removed. This happened because our income was within the range to be eligible for the Premium Tax Credit, however, when the $10,200 Unemployment Exclusion was updated in the system, it dropped our MAGI below the threshold and put us ineliegible for the Premium Tax Credit. This was not the intent of of the Unemployment provision and because it only affects a small population of taxpayers , i.e., those that had unemployment, had income that was $10,200 or less above the FPL and chose to take the Premium Tax Credit at the end of the year instead of monthly subsidies, this unintended consequence was likely not discussed. From my conversation with the IRS, the Unemployment tax break is not a mandatory deduction, therefore there should be an option for those to not take the deduction if it doesn't benefit them. Turbo Tax does not let you exclude the Unemployment deduction, so you would be forced to file a paper return and not take the $10,200 Unemployment exclusion.

C

Cynthiad66

No. You are not required to file an amended return or a paper return. Since you have filed already the IRS will automatically make the changes necessary to adjust your refund amount. It may come separately from your original refund.

If you have already filed your 2020 Form 1040 or 1040-SR, you should not file an amended return at this time. The IRS will issue additional guidance as soon as possible.

Use this link for more information from the IRS: Unemployment Compensation Exclusion

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