Author Topic: Coronavirus Stimulus Aid Package  (Read 74405 times)

Offline TBD

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Re: Coronavirus Stimulus Aid Package
« Reply #1220 on: March 24, 2021, 02:10:56 PM »
2020: Glad I'm not a doctor.
2021: Glad I'm not an accountant.
2020/2021 Glad you are a Business owner with multiple employees AND has a good accountant

Offline cgr

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Re: Coronavirus Stimulus Aid Package
« Reply #1221 on: March 24, 2021, 03:07:39 PM »
Correct, plus any additional refunds owed due to a decrease in AGI.
No amended return is required (I'm not confident in their ability to pull this off, but I guess we'll see).
https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation
And.... the IRS changed the guidance to "If you have already filed your 2020 Form 1040 or 1040-SR, you should not file an amended return at this time. The IRS will issue additional guidance as soon as possible."
Yesterday it said: "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."

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Re: Coronavirus Stimulus Aid Package
« Reply #1222 on: March 24, 2021, 03:31:43 PM »
https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation
And.... the IRS changed the guidance to "If you have already filed your 2020 Form 1040 or 1040-SR, you should not file an amended return at this time. The IRS will issue additional guidance as soon as possible."
Yesterday it said: "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."

Perhaps this was prescient...

Correct, plus any additional refunds owed due to a decrease in AGI.
No amended return is required (I'm not confident in their ability to pull this off, but I guess we'll see).

Offline Dan

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Re: Coronavirus Stimulus Aid Package
« Reply #1223 on: March 24, 2021, 04:45:51 PM »
There's 2 parts to this:
-No unemployment income is counted to calculate the $150k UI deduction threshold
-for stimulus, final AGI is used, which includes all unemployment income less the $10,200 deduction

OK, let's try this again.

Couple made $170,399 including $20K/spouse unemployment.
MAGI=$170,399-$40,000=$130,399. Qualified for unemployment exclusion
Taxable income=$170,399-$20,400=$149,999. Qualified for stimulus


Couple made $170,399 including $40K unemployment for one spouse only.
MAGI=$170,399-$40,000=$130,399. Qualified for unemployment exclusion
Taxable income=$170,399-$10,200=$160,199. Unqualified for stimulus


Couple made $181,399 including $20K/spouse unemployment.
MAGI=$181,399-$40,000=$141,399. Qualified for unemployment exclusion
Taxable income=$181,399-$20,400=$160,999. Unqualified for stimulus


Couple made $181,399 including $5K for Spouse A and $15K for Spouse B in unemployment.
MAGI=$181,399-$20,000=$161,399. Unqualified for unemployment exclusion
Taxable income=$181,399-$0=$181,399. Unqualified for stimulus


Couple made $190,399 including $20K/spouse unemployment.
MAGI=$150,399=Unqualified for unemployment exclusion
Taxable income=$190,399-0=$190,399. Unqualified for stimulus.

Or in the last 2 scenarios does the stimulus test still ignore the $10,200 despite it being unqualified for the tax exclusion? In other words should there be a separate calculation for Final AGI for the stimulus test and actual taxable income?
« Last Edit: March 24, 2021, 04:51:24 PM by Dan »
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline cgr

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Re: Coronavirus Stimulus Aid Package
« Reply #1224 on: March 24, 2021, 05:15:38 PM »

Or in the last 2 scenarios does the stimulus test still ignore the $10,200 despite it being unqualified for the tax exclusion? In other words should there be a separate calculation for Final AGI for the stimulus test and actual taxable income?
Your math is correct. There's no $10,200 deduction if you don't qualify based on MAGI less UI, so there's no stimulus in those cases.

Offline TBD

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Re: Coronavirus Stimulus Aid Package
« Reply #1225 on: March 24, 2021, 05:30:22 PM »
OK, let's try this again.

Couple made $170,399 including $40K unemployment for one spouse only.
MAGI=$170,399-$40,000=$130,399. Qualified for unemployment exclusion
Taxable income=$170,399-$10,200=$160,199. Unqualified for stimulus


Just for 1 person to earn 40K UI in 1 year is very unlikely but maybe in 2020 it was possible. In NJ sure, NY maybe...
$504*52
$600*17
$300*6
correct?

Offline cgr

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Re: Coronavirus Stimulus Aid Package
« Reply #1226 on: March 24, 2021, 06:22:02 PM »
Just for 1 person to earn 40K UI in 1 year is very unlikely but maybe in 2020 it was possible. In NJ sure, NY maybe...
$504*52
$600*17
$300*6
correct?
Massachusetts- up to $1,234/week w/dependents

Offline Dan

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Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Online etech0

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Re: Coronavirus Stimulus Aid Package
« Reply #1228 on: March 24, 2021, 06:40:43 PM »
Quote
But, would the $10,200 be counted or excluded from be counted in the $150,000 cap?
??
Workflowy. You won't know what you're missing until you try it.

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Re: Coronavirus Stimulus Aid Package
« Reply #1229 on: March 24, 2021, 06:45:49 PM »
Quote
Couple made $170,399 AGI including $20K/spouse in unemployment compensation
I'd say /person not /spouse
Quote
As this is under $150,000, the couple is qualified for the full $1,400 stimulus check for each adult and child.
I'd say "qualifies" instead of "is qualified"
Same in other scenarios

I didn't read the numbers, someone else can take care of that part :)
Workflowy. You won't know what you're missing until you try it.

Offline cgr

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Re: Coronavirus Stimulus Aid Package
« Reply #1230 on: March 24, 2021, 06:52:44 PM »
Any proofreaders around?

https://www.dansdeals.com/more/coronavirus/new-irs-ruling-means-people-will-eligible-tax-free-unemployment-compensation/
MAGI actually has a different definition, and for this calculation MAGI less unemployment is used.

Offline Dan

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Re: Coronavirus Stimulus Aid Package
« Reply #1231 on: March 24, 2021, 07:01:03 PM »
MAGI actually has a different definition, and for this calculation MAGI less unemployment is used.
What would you change it to?
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline cgr

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Re: Coronavirus Stimulus Aid Package
« Reply #1232 on: March 24, 2021, 07:09:24 PM »
What would you change it to?
Using Scenario 1:
Couple made $170,399 MAGI including $20K/spouse in unemployment compensation
Unemployment compensation test: $170,399 MAGI-$40,000 unemployment compensation=$130,399 MAGI less UI.

I can' think of a more eloquent way to state this...

Offline Dan

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Re: Coronavirus Stimulus Aid Package
« Reply #1233 on: March 24, 2021, 07:12:14 PM »
Using Scenario 1:
Couple made $170,399 MAGI including $20K/spouse in unemployment compensation
Unemployment compensation test: $170,399 MAGI-$40,000 unemployment compensation=$130,399 MAGI less UI.

I can' think of a more eloquent way to state this...
Sigh.
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Offline TBD

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Re: Coronavirus Stimulus Aid Package
« Reply #1234 on: March 24, 2021, 09:28:20 PM »
Sigh.
If that number is below $150,000 for a married couple filing jointly than they can exclude up to $10,200 per worker in unemployment compensation from their taxable income.

@Dan the 150k limit is for single filers also not just joint filers

Offline TBD

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Offline TBD

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Re: Coronavirus Stimulus Aid Package
« Reply #1236 on: March 31, 2021, 04:28:10 PM »
https://www.irs.gov/newsroom/irs-to-recalculate-taxes-on-unemployment-benefits-refunds-to-start-in-may

Because the change occurred after some people filed their taxes, the IRS will take steps in the spring and summer to make the appropriate change to their return, which may result in a refund. The first refunds are expected to be made in May and will continue into the summer.

For those taxpayers who already have filed and figured their tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation and tax. Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed.

For those who have already filed, the IRS will do these recalculations in two phases, starting with those taxpayers eligible for the up to $10,200 exclusion. The IRS will then adjust returns for those married filing jointly taxpayers who are eligible for the up to $20,400 exclusion and others with more complex returns.

There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return.

For example, the IRS can adjust returns for those taxpayers who claimed the Earned Income Tax Credit (EITC) and, because the exclusion changed the income level, may now be eligible for an increase in the EITC amount which may result in a larger refund. However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits but now are eligible because the exclusion changed their income.

Offline shapsam

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Re: Coronavirus Stimulus Aid Package
« Reply #1237 on: March 31, 2021, 05:10:11 PM »
.

However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits but now are eligible because the exclusion changed their income.
Wow. Should a person in this situation file an amended return now or wait until they adjust and file amended return for the EITC later?

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Re: Coronavirus Stimulus Aid Package
« Reply #1238 on: March 31, 2021, 06:08:13 PM »
Wow. Should a person in this situation file an amended return now or wait until they adjust and file amended return for the EITC later?

Why wait, they can process it when they want. If they made the correction on their end and sent an additional refund, Im not sure how youd include that when amending so youre not claiming an additional refund on those $10,200/20,400.