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When will Proseries update the new unemployment waiver where $10,200 of Unemployment is no longer taxed by Federal.

RED DRAGON
Level 2

"Senate Democrats reached a compromise on Friday to narrow the scope of the enhanced unemployment benefits in the $1.9 trillion Covid-19 relief package, cutting the benefit from $400 to $300 a week but allowing the enhanced benefits to run through early October.

As part of that compromise, Democrats added language to the bill that would provide a tax waiver on up to $10,200 of unemployment insurance benefits for 2020, staff for Sen. Ron Wyden, D-Ore., confirmed Friday to CNBC Make It." https://www.cnbc.com/2021/03/05/unemployment-benefits-deal-to-waive-taxes-on-first-10200-dollars-of-...

What will happen to the returns we filed with the amount already taxed?

When can we see the $10,200 waiver in our software?

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43 Replies 43
Just-Lisa-Now-
Level 15
Level 15

It still hasnt been signed into law yet, probably take a few weeks for the software companies to catch up.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
sjrcpa
Level 15

When we ordered and reordered counters we didn't anticipate this one.


ex-AllStar
BobKamman
Level 13

Might take the IRS a few weeks to issue a worksheet that the software companies can try to program.

So my guess is -- April 14.

And for state conformity or nonconformity:

States Alabama through Kansas:  April 21

States Kentucky through Pennsylvania:  April 28

States Rhode Island through Wisconsin:  May 5

 

qbteachmt
Level 15

Things will go a bit faster than that, Bob.

"States Alabama through Kansas: April 21

States Kentucky through Pennsylvania: April 28

States Rhode Island through Wisconsin: May 5"

"Alabama, California, Maryland, Montana, New Jersey, Pennsylvania, and Virginia — opted not to tax unemployment at the state level."

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BobKamman
Level 13

But both Alabama and Montana allow a deduction for federal income tax, right?  I haven't done either of those returns recently, so I don't know if they do like Oregon and allow the final tax amount on the federal return to be used for the same year's state deduction.  And Pennsylvania has all those local taxes for cities and school districts and mosquito abatement districts.  Or maybe I'm thinking of Ohio.  Seen one Rust Belt state, seen them all.  

And your list needs to be updated.  Aren't you keeping up with the count, on questions here about Maryland?

qbteachmt
Level 15

"And your list needs to be updated"

Done.

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DRBEA
Level 3

And Virginia allows a deduction for unemployment - so, if you  allow the federal adjustment, you are lowering AGI.  Virginia starts with AGI, and then allows a deduction for unemployment.  How do we fix Virginia?

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dkh
Level 11

I don't prepare Virginia returns but here is my suggestion to help you.   Check your state website.  Indiana (my state) posted guidance on how to handle the unemployment.    If there is nothing on your state website try posting a new question in this forum to see if someone else in Virginia can tell you what they are doing.   Maybe call another preparer in your area to consult with.

Good luck.

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itonewbie
Level 15

https://proconnect.intuit.com/community/proconnect-tax-discussions/discussion/everything-i-ve-read-i...

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Still an AllStar
IRonMaN
Level 15

Holy crap.  Unbelievable.😮

Barber! Why didn't I think of this before? Getting paid to give out bad tax advice - need I say more? I've run with scissors for years so it is a natural fit.
qbteachmt
Level 15

"The legislation differs in at least three major ways from the bill that passed the House of Representatives last week. The final Senate package will have to be approved again by the House before it can be sent to President Biden for his signature.

House Majority Leader Steny Hoyer said the House will vote Monday night on the rule laying out terms for the bill’s consideration, and the House will vote on Tuesday on the Senate-passed version of the bill.

Senate Majority Leader Chuck Schumer said he has "no doubt” Biden will sign the American Rescue Plan before the March 14 deadline."

I think you are a bit early on this. It ain't even over, yet.

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dkh
Level 11

🥃               someone please teach me how to supersize this

qbteachmt
Level 15

"someone please teach me how to supersize this"

Buy the bigger bottle, next time.

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TaxGuyBill
Level 14

@dkh wrote:

🥃               someone please teach me how to supersize this


 

TaxGuyBill_0-1615170890047.png

 

BobKamman
Level 13

Just be sure to file a supersizing return before April 15 or extended due date.  

Slats
Level 3

What I expect is that the software will not be updated until close to the end of the original date for filing. It doesn't appear there is any traction for moving the filing deadline beyond 4/15 of this year even giving consideration to the massive loads placed on taxpayer and tax professionals shoulders.  We just all have to hang in, hang on and hang loose for the rhythm to catch up to the lyrics.  As for previously filed returns, there will be the need for an amendment, Form 1040X.  Thankfully those are now e-fileable which will lessen the burden. And you can be a hero to your clients by accessing them another tax refund! Expect with all the "noise" in the system to experience delays in the processing and receipt of these additional refunds though. I speculate between 8 to 12 weeks for issuance of refund after filing 1040X.  I have filed approximately 500+ returns with unemployment so I am now going for my  "fourth wind" and looking forward to a late spring and summer of lot's of time at the desk and lot's of phone conversations with clientele.  Just another rainbow after the storm.  As for ProSeries; I would expect a delay of at least 2 to 4 weeks before even alerts are seen about the changes.  As time has gone by with my last 27 years of using the software, I have seen things be delayed more often than previously.  It is nice to be able to update electronically, though I miss the days of the CD mailing and updates application at times. Seems the program worked better back in the day.

Just-Lisa-Now-
Level 15
Level 15
IRS already released guidance for reporting this UI adjustment, no software update needed. They've also said dont file any amended returns, sounds like this may auto adjust returns that have already been filed.

https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemploym...

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
rjeibasa127
Level 2

from the link you provided, we need to enter negative amount which needs to be excluded in the unemployment income in Schedule 1, line 8.

 

If the result is less than zero, enter it in parentheses. On the dotted line next to Schedule 1, line 8, enter “UCE” and show the amount of unemployment compensation exclusion in parentheses on the dotted line. Complete the rest of Schedule 1 and Form 1040, 1040-SR, or 1040-NR.

 

> in pro series, schedule 8 Line 1 is automatically calculated and cannot enter negative value. No portion also to out UCE was instructed by IRS. Should we override this value and enter the negative amount? Maybe the software will still make some updates about this.

 

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Just-Lisa-Now-
Level 15
Level 15

Not sure why people are struggling with this, hasnt anyone ever made an adjustment on the Other Income line?

UCE.png


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
Abalone
Level 2

For California, the adjustment on line 8 will cause California AGI to be understated since California will take the Federal AGI and also adjust out the unemployment income from 1099-G.

Looks like we have to manually adjust the subtraction column to match with the total unemployment to avoid double subtraction. See example below. Your thoughts?

CA adjustment.PNG

Just-Lisa-Now-
Level 15
Level 15

I made the manual adjustment on the CA return on the Sch CA,

'Add back UCE from federal return'

CAASSBACK.png CAASSBACK1.png


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
rjeibasa127
Level 2

thank you! this is very helpful!

 

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DanOakley
Level 2

This was exactly how I thought it should be done.

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s_applegate
Level 1

Lisa,

I am trying to make the adjustments your showing but I use Lacerte and it's not showing the same as your entries.  Do you use Lacerte?  If so, could you tell me where your making the adjustment to put back the UCE for California Form 540?

Thanks,

Sarah

 

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Just-Lisa-Now-
Level 15
Level 15
Im a ProSeries user, sorry.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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abctax55
Level 15

@s_applegate 

Update your software, check the box on Screen 3

Lacerte is handling it correctly.

Former Chump..umm... AllStar...This message was typed from 6 feet away so you can safely read it immediately.

If a post answers your question, click on *Accept as solution* for future searches
sulutlink
Level 1

Yes, I did it manually.

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RED DRAGON
Level 2

If that is the case, why not make the adjustment in the 1099-G box drop down? and adjust it before hand? Will that work?

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dkh
Level 11

@Just-Lisa-Now-   Where did you find the information regarding not filing amended returns for the returns already efiled/accepted with unemployment?   

 

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Just-Lisa-Now-
Level 15
Level 15
Im in multiple different tax professional groups, Ive seen it posted several times, I didnt save any links to anything official though. Theres a chance that IRS may auto correct previously filed returns.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
qbteachmt
Level 15

"Cooling Breeze For The Tax Season From Hell -

IRS Does Not Want Amended Returns Right Away
Forbes·6 hours ago"
 
 

March 12, 2021

"The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021. Additional information about a new round of Economic Impact Payments, the expanded Child Tax Credit, including advance payments of the Child Tax Credit, and other tax provisions will be made available as soon as possible on IRS.gov. The IRS strongly urges taxpayers to not file amended returns related to the new legislative provisions or take other unnecessary steps at this time.

The IRS will provide taxpayers with additional guidance on those provisions that could affect their 2020 tax return, including the retroactive provision that makes the first $10,200 of 2020 unemployment benefits nontaxable. For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return. For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance."

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dkh
Level 11

Thank you @qbteachmt        I was on irs.gov    ---geez-- didn't see that    

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uspro10
Level 1

ive never read such bull**bleep**!!!!   stop guessing....delaware got changed in a week....no guessing....

omg you people.... learn before you speak............................

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danandbarbp
Level 1

guess you were wrong 5-17 now

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Ember-K
Level 2

I read the IRS guidelines for the exclusion and I can't make heads or tails of it. I'm assuming that Proseries does not have this worksheet yet and that's why their line numbers aren't making sense. 

I have read through previous statements here and Lisa's seems to be the most effective with putting the negative number on the other income line on Line 8 schedule 1. However if a worksheet is going to be released by Proseries a date would be helpful.

Stay sane ya'll!!

 

Cheers!

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RAMTaxPrep
Level 2

I'm going to give this until April 1st and then probably adjust manually.  

Right now I'm putting those returns on "hold" until further notice.  

 

RED DRAGON
Level 2
 

 

 
Community Manager
 
 
 

Latest Update: We expect an update to ProSeries on Thursday, March 18, 2021 in the afternoon to address changes for federal returns. For more details see Generating the Unemployment Compensation Exclusion in ProSeries.

*************

Intuit is working closely with the IRS and is committed to getting you the latest IRS guidance for TY20 and what the American Rescue Plan means for you and your clients. We will keep you updated on new IRS guidance and when you can expect programs to be updated.

For the latest and greatest, check out our COVID-19 Resource Center or the Tax Law and News on the Tax Pro Center.

Check out our newest Help Article for Common Questions on the Unemployment Compensation Exclusion 

Of course we will also post any relevant product updates here in the Accountants Community under the News & Updates sections in the community. 

Please check here for the latest on the American Rescue Plan. 

 

~~~3/18/2021 3:00PM STILL WAITING FOR THE UPDATE

Ncpa12
Level 1

I don't see update yet.

Anyone ?? I use Proseries 1040 complete 

dkh
Level 11

Not yet but I'm okay with waiting until tomorrow morning if it means they get it right the first time.

Tom Yaxley
Level 1

I just updated my software 4/1/21 17:00.  No change made yet.

status?

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danandbarbp
Level 1

Is this an April Fool's joke?

I see the deduction on Schedule 1 for $10,200

No?

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