While we await President Biden's signature on the American Rescue Plan, we are monitoring the situation very closely and will provide updates as they are available. For the latest and greatest, check out our COVID-19 Resource Center, our Tax Pro Center post about the American Rescue Plan, or the Tax Law and News on the Tax Pro Center. Of course we will also post any relevant product updates here in the Accountants Community under the News & Updates sections in the community.
When the president signs the bill scheduled for Friday March 12 2021. The exclusion is for benefits paid in 2021 as far as I can see, There is no retroactive provisions for federal unemployment benefits to be tax free for those received in 2020. I am watching this closely as I received $20K in federal benefits for 2020 none of which had federal taxes withheld. OUCH! If you can document the exclusion for 2020 benefits please give us the reference, I will file an amendment to my 2020 taxes immediately.
Thank you. Found the article in the Journal of Accountancy by Ken Tysiac and Alistair M. Nevius, J.D. dated March 6, 2021. Senate passes amended $1.9 trillion COVID-19 stimulus bill. We will hope the House includes this provision and it get signed into law. To all those that reminded me the form 1040X is not available until March 16, 2021 thank you as well. Will be interesting to see how the IRS responds to this. Looks like the 1040X will keep us busy for a while.
President Biden signed it 5 hours ago. Any update on at least a timeframe of when the software will be updated?
My understanding is that first the IRS has to set their programming so the E-File system accepts it, then Intuit and the other providers have to reprogram their software to apply the law and any resulting consequences.
I'm guessing a Minimum of 1 Week, but more likely, 10 days, so perhaps around Tuesday March 23.
It's OK, not like I have any lower income clients who received Unemployment Benefits last year. I guess the IRS's little game of "No Way, We Won't Delay," comes to an end next week. Otherwise I foresee plenty of chaos over the next 5 weeks.