Unemployment exclusion

[crest404]

When filing married filing separately, does the $150,000.00 AGI limiattation for unemployment exclusion apply to each spouse separately?

[Just-Lisa-Now-]

The program has been updated for it, what happens when you enter UI into an MFS return?

[crest404]

The program applies the full $150,000.00 AGI exclusion. Just seems odd that the exclusion is the same for a joint return and filing separately. It does not halve the exclusion limit. So if you file jointly there are cases with no excluded unemployment but if you file separately both get an exclusion. Maybe just the way th exclusion was passed in the legislation.

[qbteachmt · Accepted solution]

"Just seems odd that the exclusion is the same for a joint return and filing separately."

That's right, though.

[Taxadventures]

That still doesn't address the thorny problem of how to report unemployment in a community property state since there is no way I can find to adjust each couple's income and still have the unemployment portion be taken off from taxable income from the spouse who didn't directly get paid unemployment. Anyone got an idea how to do that?

[qbteachmt]

"since there is no way I can find to adjust each couple's income"

ProSeries has a MFS worksheet.

[tjwoods69]

This is very helpful info. We have to mark returns to apply ARPA provisions and comparisons will show up on MFS comparisons. The option to check this box which was added as a result of the ARPA:

Go to General > Misc Info > Miscellaneous > check the box for "Apply American Rescue Plan Act provisions

[tjwoods69]

I contacted ProConnect chat on this and the response was "Unfortunately you will have to manually re-enter the information. You have to make 2 separate returns". 

That seem like way too much additional work to re-enter manually so instead, I copied the original return twice and renamed the 2 returns, then checked MFS for each taxpayer and adjusted info for each taxpayer respectively. Still took some time but much less than re-entering all the info. You can use the MFS Comparison as a guide to make sure info isn't duplicated on both returns and assure and the numbers add to same amount on the original joint return. Hope this helps.

[tjwoods69]

Update:   You can easily copy and edit the first (primary) taxpayer's return. To interface with Intuit Link, you will have to create a 2nd return for the spouse as a new client since Intuit Link only allows 1 email address for sharing documents. In this instance, it's best to list the couple as 2 separate clients -or- provide the spouse with copies of their documents by means other than Intuit Link. Legally, the former is the best approach to assure conforming with ethic rules.