I've Counted - 74,216 Posts About Unemployment

[dascpa]

Just like repetitive prescription ads on tv and repeat commercials on Spotify, you would think this unemployment was the biggest tax law change in history. And no one reads or searches prior posts.  Wait for the software change.  Wait for the states to tell you what they're doing. Move on to the next zillion returns that need to be started. 

Can you imagine the old days when we sent our tax input sheets out to Dallas for Computax or whomever to prepare the return and then send again when we wanted to change something?  Remember when ADP picked up check stubs daily to enter into their general ledger system and returned them the next day?

[TaxGuyBill]

Does this post make the it 74,217 posts about unemployment?   😂

[sjrcpa]

@dascpa You must be at least as old as me.😄 I remember Dynatax and Computax.

I don't remember ADP and check stubs. But maybe I just have bad memory.

[dkh]

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@dascpa wrote:

 Wait for the software change.  Wait for the states to tell you what they're doing. Move on to the next zillion returns that need to be started. 

 But is this really what we need to do?  Why do we need a software change?   @Just-Lisa-Now-  has said in several post she's going forward now with putting the adjustment on Schedule 1 line 8. - no need for the software update.  We all can do math (or at least our calculators can).   Will not waiting cause the returns to not be processed properly with IRS ?                 

[Just-Lisa-Now-]

Simple straight forward returns Im adjusting manually, IRS gave us instructions, why not use them? The software is just a tool.

The ones with PTC, Im waiting on, not sure Im comfortable with how the it effects the PTC....some people lose the net premium tax credit if their income is too low, do we HAVE to take the exclusion?

[dkh]

https://proconnect.intuit.com/community/form-1099-g/help/generating-the-unemployment-compensation-ex... SOFTWARE UPDATE EXPECTED THURSDAY, MARCH 18TH !!!!

[TaxGuyBill]

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@Just-Lisa-Now- wrote:
The ones with PTC, Im waiting on, not sure Im comfortable with how the it effects the PTC....some people lose the net premium tax credit if their income is too low, do we HAVE to take the exclusion?

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There isn't any repayment of the Advance credit, so the excluded unemployment won't result in a repayment if the taxpayer's income falls too low.

If the taxpayer did not receive any Advance credit, you are right, making the unemployment non-taxable could disallow the PTC for 2020.  Offhand, I don't see any way to avoid that.

[Just-Lisa-Now-]

So do we HAVE to take the UI exclusion?

[TaxGuyBill]

That's what the law says.  It says "gross income of such taxpayer shall not include so much of the unemployment compensation received by such taxpayer (or, in the case of a joint return, received by each spouse) as does not exceed $10,200."

I don't see anything that says it is optional.

One other word of warning ... I know that you have been manually adding the deduction, but have you been avoiding returns that involve some of the things that use MAGI that are NOT affected by the $10,200 exclusion?  Probably the most common one is how much Social Security is taxable is based on MAGI, which is based on the full amount of Unemployment (the $10,200 exclusion is not used).

[IRonMaN]

I’ve also gone the same route as Lisa on a few returns.  It’s unbelievable how many people milked the system, um, I mean collected unemployment this past year.  Some of my clients really did need the unemployment but others just gamed the system.  For those returns that I have prepared in the last few days that didn’t have any potential complications I went ahead and got them done.  Minnesota is still in limbo but they could still be in limbo a year from now so I’m just plugging onward with an add back on Minnesota.

[Just-Lisa-Now-]

yes, any return that has things that use AGI or MAGI Ive still got in my stack...just clearing out the EZ returns.

[BobKamman]

@TaxGuyBill "Probably the most common one is how much Social Security is taxable is based on MAGI,"

I'm trying to think of someone with Social Security income who is not already at 85% without being far from $75K or $150K.  

[BobKamman]

Don't complain.  It took everyone away from "how do I spread IRA distributions over three years and avoid the 10% penalty" questions.  Not to mention, "The software is wrong, it's giving RRC to someone who died last year."