Level 4

Question

Unemployment exclusion being double counted in state returns

Forum|Forum|5 years ago
March 22, 2021
20 replies
34 views

Apologies if this is a duplicate post. I tried several keyword searches and did not hit what I was looking for.

I noticed that on VA and CA returns that I am preparing, Pro Series Basic is double deducting the federal exclusion for unemployment compensation. Example:

TP has $30.2K of gross income, including $10.2K of unemployment comp. Federal return correctly subtracts the $10.2K exclusion, and calculates AGI as $20K.

VA and CA start with Federal AGI, and both subtract the $10.2 federal exclusion, thus, double subtracting. My clients would appreciate this if it were correct. When can we expect a bug fix?

ProSeries Basic

This topic has been closed for replies.

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nancyrosetaxserv

Level 3

I am wondering the same thing! I have not heard anything about any update that will fix this glitch. Tried to call ProSeries this morning but the wait time was not worth it when this busy!

The_AntiTax_Man

Level 7

PS20 is now deducting the Unemployment off of the Iowa return. So, following the federal rule.

The_AntiTax_Man

Level 7

Iowa: Unemployment Compensation Exclusion

Because Iowa is a state that automatically conforms with the Internal Revenue Code, certain unemployment compensation will not be included in Iowa income. Based on the federal legislation, the first $10,200 of unemployment compensation income is excluded from taxation for qualifying taxpayers.

Because the federal legislation was enacted subsequent to many taxpayers filing their returns, taxpayers were unable to take advantage of this change. As a result and to assist these taxpayers, the Department will begin making unemployment compensation related automatic adjustments. The adjustment process may take up to 90 days due to cross-checking these amounts against 1099s and validating eligibility to ensure accuracy and eliminate fraud.

Taxpayers will not need to file an amended Iowa tax return if their only adjustment pertains to unemployment compensation. Taxpayers filing an original 2020 individual income tax return should report the unemployment compensation exclusion amount on Form IA 1040, line 14, using a code of M.

Just-Lisa-Now-

Intuit Community Champion

Ive been adding the excluded amount back to CA on the Sch CA worksheet, Line 8F

I dont know how VA works.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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nancyrosetaxserv

Level 3

I've been thinking of doing that - it beats waiting forever. It would be nice to hear from ProSeries about it on this forum though....

IRonMaN

Level 15

They issued an alert this morning in your software saying they were waiting on states to decide what to do. So that means you have to figure stuff out on your own until they update your state.

Slava Ukraini!

rbynaker

Level 13

Hey Frank!

I haven't heard anything from VA Tax yet about how they want us to present this on the tax return. I'd guess we'll either reduce the VA subtraction to the net amount of UI included on the federal return, or we'll keep the full subtraction and add some sort of other addition.

Richmond has a bunch of stuff to update us on with conformity passing last week, so hopefully this will be included in the mix.

I've been working on my TX and WA clients.

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FrankKAuthor

Level 4

This should be a no-brainer for states that historically do not tax unemployment compensation.

With respect to the states that do, I read that SC expects us to add it back, since SC does tax unemployment compensation.

rbynaker

Level 13

For SC:

TaxAct says "legislation is pending"

https://www.taxact.com/support/25710/2020/american-rescue-plan-unemployment-exclusion/#South%20Carolina

Drake says "Conformity bill is under consideration"

https://kb.drakesoftware.com/Site/Browse/17148/State-Conformity-to-ARP-Unemployment-Compensation

Rick

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LotusAccountancy

Level 3

anyone know if proseries gonna fix it?

IRonMaN

Level 15

Eventually.

Slava Ukraini!

JRC

Level 7

Happy to report the Wisconsin is very quick to notify us on on how to make corrections to these changes. Unfortunately when Intuit makes their changes to the program we have to be careful with our prior corrections that we already made.

Retirement is sounding good right about now...

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FrankKAuthor

Level 4

The unemployment compensation bug appears to be fixed in today's update to ProSeries Basic. I checked two states (VA and CA). I have not checked ProSeries Pro yet.

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dbelling

Level 4

It is doing the same on my returns. when I save and efile I go back and check the return and UCE is doubled. I sure hope this is not what was sent to the IRS....what a mess.

Iowa: Unemployment Compensation Exclusion

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