Below is a recent announcement from the Arizona Department of Revenue. Click Here for the complete statement (also posted below).

“Federal legislation enacted on March 11, 2021 included a provision to exclude up to $10,200 of unemployment benefits from federal income tax. Arizona later conformed to the tax provisions in the American Rescue Plan Act of 2021, resulting in the same $10,200 of unemployment benefits being excluded from Arizona income tax.

Who is impacted? 
Arizona taxpayers who received unemployment benefits during 2020 and filed their Arizona tax return before the March 11, 2021 enactment of the American Rescue Plan Act of 2021 must amend their 2020 Arizona tax return to receive a refund of the amount of Arizona income tax they overpaid. Arizona taxpayers who received unemployment benefits during 2020 and filed their Arizona income tax return after March 11, 2021 most likely already received the benefit of the unemployment exclusion and should not file an Arizona amended return.

Regardless of whether they filed before or after March 11, however, Arizona taxpayers who received automatic federal income tax refunds of unemployment benefits from the IRS should amend their 2020 Arizona income tax return.

Will Arizona income tax refunds be issued automatically like the IRS is doing? 
No. To receive an Arizona income tax refund of unemployment benefits, taxpayers will need to file an amended Arizona return (Arizona Form 140X).

When should I amend my 2020 Arizona income tax return?  
You may amend your 2020 Arizona income tax return for a refund of your unemployment benefits only after you amend your 2020 federal income tax return or after the IRS automatically adjusts your 2020 federal income tax return.  In order to receive a refund of your 2020 unemployment benefits you will need to amend your 2020 Arizona income tax return within 4 years of the original due date of the return.

What information do I need to have to file an Arizona amended return? 
Taxpayers will need a federal transcript of their 2020 income taxes after the IRS adjusts their federal income tax return. Request a transcript at: https://www.irs.gov/individuals/get-transcript.

How do I file an Arizona amended return?  
Arizona taxpayers will need to file an Arizona Form 140X to amend their 2020 Arizona tax return.

Most Arizona residents will be able to complete the Arizona Form 140X by following the simplified instructions at:
https://azdor.gov/sites/default/files/media/FORMS_INDIVIDUAL_2020_140X-UI-Notice.pdf

Part-year residents and nonresidents will need to refer to the full Arizona Form 140X instructions. Additionally, resident taxpayers with changes beyond unemployment, the excise tax credit, and the family tax credit will need to refer to the full Arizona Form 140X instructions at: https://azdor.gov/forms/individual/individual-amended-return-form

Can I e-file Arizona Form 140X?  

The Arizona Form 140X is not currently available for e-file. It must be filed by paper.”

The Nebraska Department of Revenue released a statement today regarding the treatment of returns impacted by the American Rescue Plan Act (ARPA), specifically around Unemployment Exclusions Adjustments. Read the full statement here.

“The American Rescue Plan Act of 2021 (ARPA) was signed into law by President Biden on March 11, 2021. ARPA includes a retroactive provision making the first $10,200 per taxpayer of 2020 unemployment benefits nontaxable for taxpayers with modified federal adjusted gross income (AGI) of less than $150,000. For married, filing jointly taxpayers, each spouse may exclude up to $10,200.

The Nebraska Department of Revenue (DOR) will automatically adjust the AGI and recalculate the tax on the returns of individuals who electronically filed their returns with Nebraska prior to April 1, 2021 to the extent that DOR can determine that the unemployment compensation was not excluded from income. There are exceptions noted below.

If this adjustment is made to your return, you will receive a letter from DOR notifying you of the correction. Please review the adjustment made and your filed return when you receive this notification and consider if an amended return is needed. Please attach a copy of your notice of adjustment from the IRS or a copy of the federal amended return if you file a Nebraska amended return.

If any of the following apply, DOR will not automatically adjust your return to exclude any unemployment that should be excluded under ARPA. To exclude this income, you must file an Amended Nebraska Individual Income Tax Return, Form 1040XN, to receive the adjustment that you are entitled to:

• Returns filed on paper;
• Returns filed using NebFile;
• Partial-year or nonresident returns;
• A Nebraska amended return was previously filed for tax year 2020;
• If the box on line 29 on your Nebraska return was checked for using federal tax; or
• Your return was filed after March 31, 2021, and did not claim the exclusion for unemployment compensation.

DOR will not automatically adjust credits that may be impacted by the reduction to federal AGI. Taxpayrs who become eligible for any credits or any increase in credit amounts due to this adjustment must file an Amended Nebraska Individual Income Tax Return, Form 1040XN, to claim or change a credit.”

Update: 6/10/21

Maryland is now able to accept returns impacted by Reject Codes Form 502-01730-020 and Form 502-01730-012. Impacted returns can now be resubmitted.

If any Maryland returns received the below reject codes yesterday (4/15) and this morning prior to 7am ET, they can be resubmitted at this time. This relates to MD EIC updates and the latest schema was not released into production until this mornings deployment.

• Form 502-01730-012
• Form 502-01730-020

Issued on May 26th, South Carolina has adopted the Federal suspension of tax on a portion of unemployment compensation for tax year 2020. The latest updates are already live in our applications as of 7:00am ET, June 1st. To review the full policy advisory from South Carolina, please click here. For any SC taxpayer that can now take advantage of this recently adopted legislation, South Carolina will require an amended SC return be prepared and filed.

Software vendors received the below message from CA regarding a delay in acks from returns filed on or around May 5th, 2021. CA acknowledgements should start to come in as CA processes their backlog.

“The issues caused by yesterday’s power outage have been resolved. SWIFT is now up and running and we are able to receive e-filed returns. Again, we apologize for the inconvenience.”

Software vendors received the below message from MA.

“Please be advised that on Monday, May 3, we had a systemic issue which did not allow us to acknowledge some returns (all tax types). This issue is being fixed and the missing acknowledgements are scheduled to be sent out next Tuesday, May 11.“

ALDOR Announces Relief for Taxpayers Affected by Severe Weather in March

AL Department of Revenue released the above statement for Taxpayers impacted by the severe weather in March.

Message from Ohio sent to all software providers.

“We had a population of 200 submissions from April 14, 2021 that were processed but unfortunately acknowledgements were not sent.  Our tech team has corrected the issue and those missing acknowledgements are scheduled to go out tonight.“