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Should the unemployment exclusion effect line 3 on the social security benefits worksheet?

m-resetar
Level 1
Why doesn't the unemployment exclusion change the taxable amount  of my clients social security?
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5 Replies 5
Just-Lisa-Now-
Level 15
Level 15

SS uses MAGI that includes the entire amount of UI income.


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m-resetar
Level 1

Thank you, much appreciated.

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abctax55
Level 15

YVW - many have asked.  

Most want us to "prove" it....

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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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JohnJ47
Level 1

It would seem your social security benefits worksheet instructions for line 3 need to be changed if the UIC is to be included in the income on that line or at least as it appears on the worksheet.

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