Level 2

Question

ProSeries 2020 Tax Year changes due to American Rescue Plan

Forum|Forum|5 years ago
March 12, 2021
23 replies
91 views

Has anyone heard from Intuit regarding updating ProSeries for the changes just passed for TY 2020? Also are they planning training videos for ProSeries program/form changes?

Looks like another crazy tax filing season is in the making for all of us. Already will need to file amended returns for some clients who have filed.

ProSeries Professional

This topic has been closed for replies.

TaxGuyBill

ProSeries can't update anything until the IRS gives some guidance.

We don't even know if we will need to amend. It is POSSIBLE the IRS will just automatically fix things.

But we need to wait until the IRS give guidance, and we just need to be patient. It could be several weeks.

Just-Lisa-Now-

Intuit Community Champion

This should show up on IRS.gov soon...looks like an adjustment on the Other Income line (Sch 1 Line8 with the UCE description (Unemployment Compensation Exclusion).

Those that already filed, hold off on amended returns, IRS has not issued any guidance yet for those.

New Exclusion of up to $10,200 of Unemployment Compensation

If your modified adjusted gross income (AGI) is less than $150,000, the American Rescue Plan enacted on March 11, 2021, excludes from income up to $10,200 of unemployment compensation paid in 2020, which means you don’t have to pay tax on unemployment compensation of up to $10,200. If you are married, each spouse receiving unemployment compensation doesn’t have to pay tax on unemployment compensation of up to $10,200. Amounts over $10,200 for each individual are still taxable. If your modified AGI is $150,000 or more, you can’t exclude any unemployment compensation.

The exclusion should be reported separately from your unemployment compensation. See the updated instructions and the Unemployment Compensation Exclusion Worksheet to figure your exclusion and the amount to enter on Schedule 1, lines 7 and 8.

The instructions for Schedule 1 (Form 1040), line 7, Unemployment Compensation, are updated to read as follows.

Line 7

Unemployment Compensation

You should receive a Form 1099-G showing in box 1 the total unemployment compensation paid to you in 2020. Report this amount on line 7.

Caution. If the amount reported in box 1 of your Form(s) 1099-G is incorrect, report on line 7 only the actual amount of unemployment compensation paid to you in 2020.

Note. If your modified adjusted income (AGI) is less than $150,000, the American Rescue Plan enacted on March 11, 2021 excludes from income up to $10,200 of unemployment compensation paid to you in 2020. For married taxpayers, you and your spouse can each exclude up to $10,200 of unemployment compensation. For example, if you were paid $20,000 of unemployment compensation and your spouse was paid $5,000, report $25,000 on line 7 and report $15,200 on line 8 as a negative amount (in parentheses). The $15,200 excluded from income is $10,200 for you and all of the $5,000 paid to your spouse. If your modified AGI is $150,000 or more, you can’t exclude any unemployment compensation. Use the Unemployment Compensation Exclusion Worksheet to figure your modified AGI and the amount you can exclude.

If you made contributions to a governmental unemployment compensation program or to a governmental paid family leave program and you aren't itemizing deductions, reduce the amount you report on line 7 by those contributions. If you are itemizing deductions, see the instructions on Form 1099-G.

Caution. Your state may issue separate Forms 1099-G for unemployment compensation received from the state and the additional $600 a week federal unemployment compensation related to coronavirus relief. Include all unemployment compensation received on line 7.

If you received an overpayment of unemployment compensation in 2020 and you repaid any of it in 2020, subtract the amount you repaid from the total amount you received. Enter the result on line 7. Also enter “Repaid” and the amount you repaid on the dotted line next to line 7. If, in 2020, you repaid more than $3,000 of unemployment compensation that you included in gross income in an earlier year, see Repayments in Pub. 525 for details on how to report the payment.

Tip. If you received unemployment compensation in 2020, your state may issue an electronic Form 1099-G instead of it being mailed to you. Check your state's unemployment compensation website for more information.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

JCTaxAdv

Level 3

Have others noticed that the descriptive instructions that the IRS has tentatively printed for the Unemployment Compensation Exclusion Worksheet - Schedule 1, line 8, seems odd (repetitive, duplicate addition) at steps 2 & 3? https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemployment-compensation

There seems no substitute for an actual UC Exclusion Worksheet for software programmers and tax preparers to properly and actually step through the new process for exclusion. Hope Intuit may be able to offer some kind of visualization/examples once the updates are ready to present. Sitting tight and waiting for now.

Just-Lisa-Now-

Intuit Community Champion

Im sure Intuit is working on a UCE worksheet, the majority of returns wont need it, we can just make the adjustment ourselves....theres also going to be an APTC payback adjustment needed for that new law, so returns I have that include both UI and APTC payback, Im going to hold onto until we see some software changes or hear that IRS will make the APTC adjustment themselves and issue refunds automatically.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

EDauerman

Level 4

Hi,

Any word on whether or not states are following, such as New York for excluding the unemployment? I haven't been able to find out yet. Curious. Will it otherwise be a IT 558 form add back?

For Federal, I also agree that the UCE worksheet may not be necessary as the changes will flow to Schedule 1, but will wait for the final guidance from the IRS.

It does help for obtaining estimates for clients to know how to circumvent the worksheet for now.

malloytax

Level 2

Need to hear from Pro Series; why no guidance at all ? Should we follow IRS instruction issued Friday or wait for a software change ?

malloytax

Level 2

Also need guidance on forgiveness of excess premium tax credit ? What is forthcoming from Pro Series ?

EDauerman

Level 4

Check the IRS site; it is not ProSeries responsibility to give updates to you on tax changes. They have indicated they are in the process of working with the IRS on their website.

Here's the IRS latest link.

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

malloytax

Level 2

I can read, but want to know what programing changes are anticipated.

gparch1

Level 4

Drake is releasing their worksheet for the unemployment worksheet today. Yet another reason to switch from ProSeries Professional next tax season.

JCTaxAdv

Level 3

I have brought in an additional, secondary tax program to run in parallel with ProSeries for my tax practice this year, so that I can be poised to make a switch next year if I deem it necessary. Really, I think it is the IRS more so than ProSeries that is in a bit of turmoil right now – or at least they are in a pickle. In many ways, I could do without another extended filing season like last year, and clearly that is the last thing the IRS wants again. But it is not just regulatory processes and the efficient administration of tax procedures; this also involves broader political pressures and the larger needs of the society as a whole. It is largely the silence from the IRS that has me concerned right now. I think the IRS wants/wanted no part in delaying the filing deadline(s). The Service certainly was not going to extend the deadline for returns having a March 15 filing due date. Maybe the IRS has partially been biding its time. Now that March 15th has passed, I predict an uptick in more and better communication from the IRS, and think it now becomes more likely for the Service to acquiesce on extending the April 15th deadline (unless the IRS higher-ups are really intent on digging their heels in).

christijoguhn

Level 3

I still am in such awe that this is even happening to us... mid-season...

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