UI Exclusion

[dankos]

OK, I've tried two returns which require modification due to the UI fix.  I use ProSeries, but since the same underlying calculation engine is used for Intuit products, I believe these comments apply to their other tax software.

1.  The fix doesn't take into account the reduction in AGI in calculating taxability of SS benefits.  If you look at the SS Benefits Worksheet, the calculation on line 3 is incorrect.  It's taking the number on Schedule 1, line 9 without the reduction.

2.  The fix hasn't been applied to 1040-NR returns.  I've seen nothing that the exclusion is not available to NRs.

Dane  Kosaka EA

[TaxGuyBill]

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@dankos wrote:

1.  The fix doesn't take into account the reduction in AGI in calculating taxability of SS benefits.  If you look at the SS Benefits Worksheet, the calculation on line 3 is incorrect.  It's taking the number on Schedule 1, line 9 without the reduction.

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It is calculating correctly.  The calculation for taxable Social Security (and several other MAGI calculations) use the FULL amount of Unemployment.

[Just-Lisa-Now-]

Bill, so that means for PTC calculations, that excluded UI wont drop people too low to pick up the PTC, right?
It also means the income for APTC payback will be higher, but theyre working on excluding that payback...is that for everyone? I thought I read something awhile back that the exclusion to APTC payback was only if you were under 400% PFL

[TaxGuyBill]

Unfortunately for your client, PTC does use the $10,200 exclusion.

Here is a copy-and-paste list that someone on another forum wrote up (she looked up all of the Code sections and translated into English) that are NOT affected by the $10,200 exclusion (they use the FULL amount of Unemployment). 

• 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

If it is not on this list (including the PTC), the calculation uses the reduced amount of unemployment.

[Jon-L]

I ran the client query for UI and it missed 20% of my clients with unemployment - be careful