Hi online community, does any one know if NY is going to accept the federal exemption in its state tax return? I read that some congress men are trying the state to do that but as far as I know they have not accepted it yet. Be aware that when PS transfer the amount of the unemployment it also transfers the exemption, I guess we have to add it back in the state return. Any thoughts?
New York budget director Robert Mujica said Wednesday [April 7] all unemployment payments will remain subject to state taxes. “Those benefits have been subject to state tax for decades,” said Mujica. “So, that has not changed.”
I have not seen PS transfer the exemption and then having the preparer add it back it. Even before if NYS was going to tax or not it was excluded and then added in automatically, unless you manually adjusted the federal program. What the software did not due before the update was to recalculate the NYS EIC based on Federal AGI. If you had a client without EIC and who collected UC in NYS, the NYS return was calculating properly.