Question

When will the $10,200 of unemployment tax exemption go into effect?

Forum|Forum|5 years ago
March 6, 2021
59 replies
0 views

No text available

TurboTax Deluxe Online

Show previous replies

A

atkinsjam

It is retroactive for 2020, so if you filed this year already, you will need to file a 1040X for the change.

I

irunlikeataxgurl

@atkinsjam Where on the IRS website does it say that an amended return is required in this situation?

A

amt2020

Yes, I'd like to get a definite answer so I know whether I will need to initiate an amended return or if the IRS is going to correct my return. (and anyone else's that had unemployment and were already filed before they even talked about this change)

S

Sbrown12123

So, now that the tax exemption of the first $10,200 of unemployment income has passed Congress and Biden has signed it, when will turbo tax update their deduction and exemptions? I only recently got my documents and could not file until now, so I'm curious to see if my information will change as I am ready to submit them. I am thinking I should wait to see before I have to amend my tax filing.

X

xmasbaby0

Employee

https://ttlc.intuit.com/community/tax-topics/help/how-will-the-stimulus-package-impact-me/01/1393859#U1393859

You are among millions who have now been affected by a mid-tax season change in the tax law. Patience will be necessary.

TurboTax will update the software for the unemployment but there is no timeline yet.

It can take weeks to several months or more for the changes to be made to tax software. First the IRS has to change its forms. The tax software has to be changed; the IRS has to test and approve of the software. Do not expect changes in the software to happen quickly. TurboTax may have more information in the near future AFTER the bill is signed into law, and some more details emerge about how Congress and the IRS will implement the changes.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

K

Kidtageous

So now that the legislation has officially made the first $10,200 of unemployment in 2020 tax exempt, do we just subtract the $10,200 from our unemployment total or do we have to wait for turbo tax to update the app and apply a code?

macuser_22

Employee

Been answered above in this thread.

**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.**

S

slbg221

Employee

I was wondering is that 10,200 tax exemption is it on the TOTAL benefit received or just on the UNEMPLOYEMENT total not total with the extra monies received for the pandemic relief

R

rondi93

Ok, it is now law. So when can we file using this exemption?

DoninGA

Employee

@rondi93 wrote:

Ok, it is now law. So when can we file using this exemption?

After the legislation has passed Congress and after the President has signed the legislation and after the IRS has written the rules, regulations and procedures. And after the IRS has changed any forms or schedules to accept the tax code changes. And after the IRS has approved the changes in the TurboTax program that apply to the tax code changes, then it will be available for the users of the tax preparation software.

This can take anywhere from several weeks to several months before it becomes available.

See this TurboTax support FAQ for information on the American Rescue Plan - https://ttlc.intuit.com/community/tax-topics/help/how-will-the-stimulus-package-impact-me/00/1393859

L

lainie13

Now that the bill has passed and its law, when can we amend our 2020 returns to get the $10,200 unemployment credit? When will turbo tax have that updated in their system so that this edit to our amended returns can happen seamlessly?

DoninGA

Employee

@lainie13 wrote:

Now that the bill has passed and its law, when can we amend our 2020 returns to get the $10,200 unemployment credit? When will turbo tax have that updated in their system so that this edit to our amended returns can happen seamlessly?

After the legislation has passed Congress and after the President has signed the legislation and after the IRS has written the rules, regulations and procedures. And after the IRS has changed any forms or schedules to accept the tax code changes. And after the IRS has approved the changes in the TurboTax program that apply to the tax code changes, then it will be available for the users of the tax preparation software.

This can take anywhere from several weeks to several months before it becomes available.

See this TurboTax support FAQ for information on the American Rescue Plan - https://ttlc.intuit.com/community/tax-topics/help/how-will-the-stimulus-package-impact-me/00/1393859

L

lainie13

So basically everyone will have to amend their returns, or get a penalty because you didn't file on time.

E

Ed805

Is it possible we will be notified once TurboTax has been updated to reflect the changes or do we need to keep checking back for updates?

X

xmasbaby0

Employee

Those of us who are answering questions get that you need to know what to do about your unemployment and so does TurboTax. But this law was literally just signed yesterday. There are no answers yet. Congress changed a tax law in mid-tax season that affects millions of people, and now the IRS and all the tax software companies have to sort out how it will all work. We do not yet know if they will decide to extend the tax filing deadline, or what the guidelines for this are going to be. Even the IRS cannot tell you anything yet. The software cannot yet accomodate the tax law change. So.....patience and check in a few days....we hope to know more soon....

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

A

auto

Is there an update on this now that the bill is law? Does Turbotax incorporate the new calculation?

Hal_Al

Employee

The IRS has provided instructions. TT hasn't said when they'll be ready.

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

S

Sbrown12123

Nice, it shouldn't be too long for TT, as they have known for months that this was a possibility, and especially coming during mid tax season, I'm sure they put their efforts into a smooth update to their software to add that extra exemption.

Patiently waiting and reading this thread.

M

mickeylackey

It is signed into laws now. ALso was there something about sick leave being paid too?

K

Kelilloyd

Now that POTUS has signed bill how much longer untill irs updated so that turbotax updates code?

X

xmasbaby0

Employee

https://ttlc.intuit.com/community/tax-topics/help/how-will-the-stimulus-package-impact-me/01/1393859#U1393859

You are among millions who have now been affected by a mid-tax season change in the tax law. Patience will be necessary.

TurboTax will update the software for the unemployment but there is no timeline yet.

If you have not e-filed yet—-wait. And if you already e-filed and want to amend for this—WAIT.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

T

txmet

i just tested overriding schedule one and adding the information as the irs specified and it worked and the wording matches what the irs specified. it does cause an error with smart check. so there is a workaround to manually add it to schedule one but you need to be careful, i will wait a little bit before doing this, but based on what the irs receives, it will match exactly what their instructions indicate