Unemployment exclusion

Forum|Forum|5 years ago
March 14, 2021
5 replies
21 views

How do we account for the exclusion of the first $10,200 of unemployment income? Should we just adjust the amount entered, or is there a place to show the exclusion from the gross amount?

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W

wallacedk

Level 3

New Exclusion of up to $10,200 of Unemployment Compensation | Internal Revenue Service (irs.gov)

S

stuebs

Level 3

I was thinking the same thing, but then you have to consider whether it would need to be an addition for a state return. I would imaging that some states might follow the federal bill, but others may not. I'm afraid it is going to take a while and am debating whether to just wait and see before filing, or to file without claiming the exemption and amending as needed down the road.

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wallacedk

Level 3

Yes, I suspect Intuit will not have software updates for this for some time. My practice is in Pennsylvania, and the majority of my clients are PA residents. PA does not tax unemployment. So for my PA resident clients I am not worried about any state impact of the UCE.

S

stuebs

Level 3

Most of my clients are in Illinois where it is normally taxable. They work off of AGI and it is not an Illinois subtraction. Don't think they'll take too kindly to it being reduced from AGI. Might need to be an addition. What a mess.

L

LB56

Level 4

IRS.gov says there will be a worksheet but I'm not seeing it yet. I don't believe you can just subtract it off the 1099-G because of the state side (and I have seen nothing stating how my state - Massachusetts - is dealing with this issue).

ARGH

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