Unemployment sheltering MFS community property state

[Drphibes]

So, the Biden Bill signed about a week ago had some very unexpected 2020 ramifications for Californians.  California is a community property state 1/2 of all income and deductions is hers and 1/2 is his.

The bill makes the 1st $10,200 of unemployment for each person non-taxable.  However, there is a limit on income to get this.  If your adjusted gross income is over $150k (which includes the unemployment) you don't get to take advantage of this sheltering of $10,200 from income.

However, when the law was written, the limit to cut off this benefit was written $150,000 AGI for Married Joint return, for Single return, for Head of Household return, and for Married Filing Separate  (MFS) returns.  This means if you filed MFS (where the income and deductions are split 50/50 to two separate returns) each of the Married Filing Separate returns would have an income below the $150k amount and the unemployment would be split 50/50.  The law did not reduce the $150k cap on non-MFJ returns as I would have expected.  We think an oversight but the law is the law.

Example:  Your combined income is $155k, one of you had $25,000 of unemployment (which is part of the $155k income) that would not have any of it be considered non-taxable.  If Married Filing Separate returns, each of your incomes would be $77,500, well below the $150,000 cut off.  In addition, the $25,000 is split 50/50 so each of you has $12,500.  Not only do now qualify to consider the 1st $10,200 of unemployment as non taxable income, you each get to consider $10,200 of your part of the unemployment as non-taxable on each of the MFS returns.  This means you go from being taxed on the $25,000 of income to only being taxed on $4,600 of income leading to good sized reduction in taxes.

Any holes in this scenario?  Thanks in advance!