Taxable Social Security

[jrdulzo376]

Has anyone else noticed the calculation for Taxable Social Security isn't deducting the Excluded Unemployment of $10,200?  Do we know when this will be updated in Lacerte?  I have a couple clients who I just need this corrected to complete their return. 

[pamdory · Accepted solution]

Lacerte's calculation is correct.  The IRS guidance, as updated 03/23/2021, states that taxable Social Security should be calculated using Unemployment income without the $10,200 reduction.

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

[jrdulzo376]

Thank you for the Update.  I didn't catch that update yesterday....That explains why. 

[brazenbrazier]

A client just brought in a notice that the IRS REDUCED the taxable social security on their return based on the unemployment compensation they received. 

When I process the return now in Lacerte the lower tax is showing and Schedule 1 is not longer generated.

When did this change in the program come about?

[abctax55]

Late March...two months ago.

[R00STER]

One of my clients received the same notice, where it reduced the taxable social security.  The IRS disagrees with the Lacerte's Social Security Benefits worksheet. The IRS reduced the income from line 3 of the calculation by 10,200 from what Lacerte calculated.  Having said that, based on the IRS website lacerte's calculation is correct and the IRS is wrong.