Kentucky tax treatment of Unemployment Benefits

I am adding it back in on Schedule M. Nothing I am reading says that any part of unemployment will not be taxed.  Will fix things later if needed. I am explaining this to clients and it is their decision to go ahead and file or wait longer to see if Ky will follow Federal.

That is what we have been doing and checking off the box in the informational diagnostics, but for some very odd reason, after last nights updates, Lacerte has made this critical diagnostic. 

In truth, Lacerte should have automatically had this go to a Schedule M adjustment as Kentucky has never hinted that they would follow the fed's in exempting unemployment. 

It's funny that all of the other tax programs have put this as a Schedule M adjustment but not Lacerte, who will tell you that they follow the instructions of the state.  As of this moment, Kentucky has not changed its rule.  So leave this as an informational diagnostic to have us do this instead of a critical to allow us to e-file since we made the change to Kentucky to report it properly.

I read in the courier-journal that Kentucky wasn't going to exclude it. Why can't Lacerte get an answer and get the program right. It should be adding it back if it has to be taxed. 

Pro Series updated the $10,200 of excluded unemployment benefits to be taxable, but NO communication from Pro Series.  Here is what KY says :

FRANKFORT, Ky. (April 1, 2021) -- All unemployment compensation earned as a Kentucky resident is subject to Kentucky income tax. For Kentucky residents, any amount excluded up to the $10,200 on a taxpayer's federal income tax return is required to be added back on the Kentucky individual income tax return on Schedule M, Line 5 as an "Other Addition".  For part-year Kentucky residents, the amount should be included on the Form 740-NP, Section B, Column B, line 13 as unemployment compensation.​