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does the 2020 unemployment tax exclusion reduce adjusted gross income for the student loan caculation

Suzanne2
Level 1

the new update addresses the 2020 unemployment tax calculation -However when

determining the student loan interest deduction it is not backing out the unemployment tax exclusion from adjusted gross income nor .do I believe it is taking it into account to reduce taxable social security.  Should the exclusion reduce modified adjusted gross income? .

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3 Comments 3
BobKamman
Level 15

No.  There are some other discussions here about how the "conforming amendments" in the new law told us not to change those.  

abctax55
Level 15

 

Because that is the way the law says to do it:

(courtesy of TGB, Jensen, Bob and whoever else I missed).

The calculation for taxable Social Security (and about 6 other things) still use the FULL amount of unemployment.  The $10,200 exclusion does NOT apply to those calculations.

These are the items that still use the full amount (thanks to "Judy" on another forum that I'm copy-and-pasting this):

  • Taxable amount of social security
  • Exclusion for US savings bond interest used for higher education
  • Exclusion for employer-provided adoption assistance
  • Limit on deductible IRA contributions by plan participants
  • Limit on student loan interest deduction
  • Limit on deduction for tuition and fees
  • Limit on rental real estate exception to passive activity loss rules

For code-heads, these are Conformity Amendments for MAGI under Sec. 9042(b) of the ARP Act.

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Bsch4477
Level 3
Level 3

Just so I am clear. The deduction does affect the AGI with respect to calculation of Earned Income Credit?

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