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North Carolina Preparers - The program is not adding back the federal exempt unemployment

tscott1205
Level 4

It seems NC has reversed its decision on following the federal for exempting the first 10,200 of unemployment benefits. The NC program does not add it back automatically and since NC does not have a special line for it on page 2 the program will not let you efile the NC return. Please help

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11 Replies 11
Frank Broadway
Level 3

NCDOR is going to have a lot of paper returns to process. I have not seen any mention of the NCDOR allowing Tax Software to e-file tax returns with unemployment added back to income.

Tax Pro since 1993!
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Camp1040
Level 8

Why not use addition to AGI and add back the UCE on the "other" line?

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Frank Broadway
Level 3

If you put an amount on the "other" line on the Sch S for the NC, ProSeries will pop up an error window that states amounts entered on the "other" line are not eligible for e-filing.

Tax Pro since 1993!
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IH724
Level 1

Anyone know if there are any updates to this issue? Are you mailing in the NC returns or just waiting for a resolution?

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Frank Broadway
Level 3

We are waiting until 4/10/2021 to see what happens.

Tax Pro since 1993!
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IH724
Level 1

It's actually fixed!  I was so focused on Schedule S but just noticed that they are adding it directly to line 7 of the return so I removed my adjustment so I can e-file now.

Is April 10th the day they will determine if it will be excluded from income?

 

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Camp1040
Level 8

And along with the EIC fix for NYS !   The IRS does not use MAGI to calculate the EIC, since NY is based on a percentage of Fed EIC and is decoupled from the UCE, the fix is for NY to recalculate the Fed EIC and include UCE for NY purposes which results in lower NY EIC.

I only have a few NY EIC and were ready but not filed, rechecking the return found that update!

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atwood_long
Level 1

So you have to override line 7? How do you do that? What key do you hit to overide?

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Camp1040
Level 8

You do not have to override anything, NC taxes UC, and the program is updated.

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jgm6520
Level 3

I just reviewed one of my NC returns and it seems that the latest ProSeries update has added back the exclusion.

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Camp1040
Level 8

Correct, NC does not exclude UC as of today anyway.

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