Georgia did not adopt the American Rescue Plan and all unemployment is taxable to GA.   Changes have been made in the software to reflect this decision.  GA is asking that any returns already filed claiming the exclusion be amended to add back the exclusion amount.  This could potentially have a negative impact on the taxpayer return resulting in a repayment for returns filed with the American Rescue Act federal exclusion.

How do I identify these returns:  Navigate to Reports>> Management Reports>>Pro Web returns – Detailed Returns Report.

Note:  We have a pending issue where the accepted state PDF is not generating from client status. We are in the final phases of testing for this.

The American Rescue Plan Act of 2021 excludes from income the first $10,200 in unemployment compensation received in 2020 per taxpayer on their 2020 tax return. The new provision applies to taxpayers with an AGI of less than $150,000. The IRS has recently released a new unemployment compensation exclusion worksheet and updated instructions on how to file 2020 tax returns that contain unemployment income.

The exclusion amount calculated on the worksheet flows back to Schedule 1 (Form 1040), line 8. UCE will print on the line next to line 8 identifying the amount as the unemployment compensation exclusion.

• Please note that this change can have significant impacts on your state return. We are in the process of working through the states and making any modifications needed to handle the new federal changes based on the state laws as we know them today.  We STRONGLY recommend you pay close attention to the state portion of the return.  If you find any issues or have any concerns please reach out to VITA/TCE support with a detailed explanation and an example return.
• Create a return tag if you choose to hold the state portion of the return to file once your state has made a decision on whether it will conform or not to the federal changes.

Returns filed prior to the release of the Federal Update in TaxSlayer Pro will automatically re-calculate to exclude the non-taxable portion of unemployment income. This is important – Please make sure you have a copy of the originally filed federal and state return before you open these returns. The original copy of the federal tax return and the state return will be needed to plug in the original column on the Amended federal and state forms once the IRS gives guidance on if or when an amended return needs to be filed. The original return can be accessed from Client List by using the Tools dropdown to access “Client Status”. Scroll down the Client Status page to locate the Federal transmission. The left print icon, when clicked, will open a new window that includes the original Federal transmission.

• We are aware the State PDF is not generating in Client Status and have this defect reported to development (Issue 5952).

Update 3:15 PM:  The intermittent slowness has been resolved.  You may need to close your browser and open a new browser (not just the browser tab)

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Update 2:35 PM:  This seems to be intermittent.  We recommend you close your current browser (not just the tab) and open a fresh browser if you are still seeing the calculations stuck in a spin.

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We are currently experiencing issues with the calculations not updating properly.  We have opened an emergency ticket.  You can click Personal Information to break the “spin cycle” in order to exit the return or enter data directly without calculations.

8:25am ET: The issue has been resolved and access to state returns has been restored.

8:01am ET: We have received reports of users getting errors when going to the state portion of the return.  We have opened a critical ticket and are currently reviewing this error.

Update:  We have updated the tax calculations to reflect the information below.  As the IRS issues further guidance regarding UCE, we will make the appropriate calculation changes.  

Click here to view latest unemployment Instructions

We are in the process of updating the federal program to accommodate the instructions that have been released by the IRS.  If you have any of these forms or tax situations + unemployment, you will want to hold these returns until we have delivered the updated changes to the application.

Include the full amount of your unemployment compensation from Schedule 1, line 7 when figuring the following deductions or exclusions from income. See the specific form or instructions for more information. If you file Form 1040-NR, you aren’t eligible for all of these deductions. See the Instructions for Form 1040-NR for details.

• Taxable social security benefits (Instructions for Form 1040 or 1040-SR, Social Security Benefits Worksheet)
• IRA deduction (Instructions for Form 1040 or 1040-SR, IRA Deduction Worksheet)
• Student loan interest deduction (Instructions for Form 1040 or 1040-SR, Student Loan Interest Deduction Worksheet)
• Nontaxable amount of Olympic or Paralympic medals and USOC prize money (Instructions for Form 1040 or 1040-SR, Schedule 1, line 8)
• The exclusion of interest from Series EE and I U.S. Savings Bonds issued after 1989 (Form 8815)
• The exclusion of employer-provided adoption benefits (Form 8839)
• Tuition and fees deduction (Form 8917) Update 3/24:  You will receive IRS Reject Code F8917-012 if you have both unemployment and an 8917 in the return until the IRS has an opportunity to update any business rules associated with the changes to UCE due to the American Rescue Act.  Update 3/26:  The IRS has disabled this business rule
• The deduction of up to $25,000 for active participation in a passive rental real estate activity (Form 8582)

The IRS has officially posted the following information regarding returns previously filed and accepted with Unemployment.

If you have already filed your 2020 Form 1040 or 1040-SR, there is no need to file an amended return (Form 1040-X) to figure the amount of unemployment compensation to exclude. The IRS will refigure your taxes using the excluded unemployment compensation amount and adjust your account accordingly. The IRS will send any refund amount directly to you.

Note:  This is for the 1040 Federal return only.  Many states have not determined how they will handle this change.

Note:  The IRS HAS NOT issued any guidance regarding excess PTC.

*** Additional Information: X ***

Meaning:  The IRS has placed a hard stop on the primary SSN for some reason.  The 1040X will have to be filed via paper

As the Internal Revenue Service works to provide guidance for the American Rescue Act, the 14 day auto deletion for the scanned document program has been suspended at this time. We encourage sites, that are part of the scanned document program, to continue to manually delete scanned documents from returns when they are completed.