How do we handle the exclusion of 10,500 in taxable unemployment on the 2020 returns. My client is under the 150k AGI for MFJ.

[RMP]

My understanding is that the first 10,500 is not taxable on the federal return.

[IRonMaN]

You are going to get your clients in trouble if you are going to give them an extra $300 deduction once the forms are ready.

[qbteachmt]

"the first 10,500 is not taxable on the federal return"

Uh, nope.

It's not that amount and it's not a straight across computation of exclusion, either. It affects other things that also compute.