Author Topic: Coronavirus Stimulus Aid Package  (Read 153081 times)

Offline Joel

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Re: Coronavirus Stimulus Aid Package
« Reply #1200 on: March 23, 2021, 11:31:10 PM »
https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation
Quote
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.
@cgr does this mean the IRS will send back the taxes already paid for "qualified unemployment" without having to file anything again?

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Re: Coronavirus Stimulus Aid Package
« Reply #1201 on: March 23, 2021, 11:40:37 PM »
You mean this?

No. If you follow Unemployment Compensation Exclusion Worksheet – Schedule 1, Line 8 you'll see it says 2. Enter the amount from Schedule 1, lines 1 through 6. Don't include any amount of unemployment compensation from Schedule 1, line 7 on this line.

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Re: Coronavirus Stimulus Aid Package
« Reply #1202 on: March 23, 2021, 11:42:35 PM »
@cgr does this mean the IRS will send back the taxes already paid for "qualified unemployment" without having to file anything again?
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 Joel

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Re: Coronavirus Stimulus Aid Package
« Reply #1203 on: March 23, 2021, 11:49:06 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).
Nice!
Wasn't expecting the IRS to hand back taxes without needed to file a amendment..

Offline AsherO

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Re: Coronavirus Stimulus Aid Package
« Reply #1204 on: March 24, 2021, 07:15:31 AM »
Nice!
Wasn't expecting the IRS to hand back taxes without needed to file a amendment..

The alternative is for them to have to process millions of amended returns...
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Offline ShimshonK

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Re: Coronavirus Stimulus Aid Package
« Reply #1205 on: March 24, 2021, 08:35:31 AM »
I just stepped through the instructions and it's bigger than I realized- not sure why it's not being widely reported.

The $150k limit is before ALL unemployment income, not just after deducting the $10,200.
Here you go, https://www.cnbc.com/2021/03/23/10200-unemployment-tax-break-irs-makes-more-people-eligible.html

Offline Dan

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Re: Coronavirus Stimulus Aid Package
« Reply #1206 on: March 24, 2021, 11:53:24 AM »
Here you go, https://www.cnbc.com/2021/03/23/10200-unemployment-tax-break-irs-makes-more-people-eligible.html
Confusing example.

"Take the example of a married couple filing a joint tax return. They had job income of $140,000 last year. They also each had $10,200 of income from unemployment benefits.

Under prior IRS guidance, this couple would not have qualified for the tax break, due to joint income of $160,400 when factoring in jobless aid."

What if they had $20K each of unemployment income? Is that all excluded from MAGI?
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Re: Coronavirus Stimulus Aid Package
« Reply #1207 on: March 24, 2021, 12:11:00 PM »
Confusing example.

"Take the example of a married couple filing a joint tax return. They had job income of $140,000 last year. They also each had $10,200 of income from unemployment benefits.

Under prior IRS guidance, this couple would not have qualified for the tax break, due to joint income of $160,400 when factoring in jobless aid."

What if they had $20K each of unemployment income? Is that all excluded from MAGI?
Yep! And since they get the $10,200 deduction (X2), they now qualify for stimulus as well.

Some households that are borderline low income will now qualify for EITC.

Offline etech0

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Re: Coronavirus Stimulus Aid Package
« Reply #1208 on: March 24, 2021, 12:25:11 PM »
Yep! And since they get the $10,200 deduction (X2), they now qualify for stimulus as well.

Some households that are borderline low income will now qualify for EITC.
what's the threshhold for EITC?
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Offline Dan

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Re: Coronavirus Stimulus Aid Package
« Reply #1209 on: March 24, 2021, 12:36:13 PM »
Is this right?

Couple made $170,399 including $20K/spouse unemployment.
MAGI=$130,399?
Taxable Income=$149,999?
Qualifies for $20.4K unemployment exclusion, stimulus and child tax credit


Couple made $170,399 including $40K unemployment for one spouse only.
MAGI=$130,399?
Taxable Income=$160,199?
Qualifies for $10.2K unemployment exclusion, stimulus and child tax credit


Couple made $180,399 including $20K/spouse unemployment.
MAGI=$140,399?
Taxable Income=$159,999?
Qualifies for $20.4K unemployment exclusion, stimulus and child tax credit


Couple made $190,399 including $20K/spouse unemployment.
MAGI=$150,399?
Taxable Income=$190,399?
Does not qualify for unemployment exclusion, stimulus or child tax credit
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.

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Re: Coronavirus Stimulus Aid Package
« Reply #1210 on: March 24, 2021, 01:02:06 PM »
Is this right?
CTC will be based on 2021 AGI, so it shouldn't be part of this calc.

Couple made $170,399 including $20K/spouse unemployment.
MAGI=$130,399?
Taxable Income=$149,999?
Qualifies for $20.4K unemployment exclusion, stimulus
Correct

Couple made $170,399 including $40K unemployment for one spouse only.
MAGI=$130,399?
Taxable Income=$160,199?
Qualifies for $10.2K unemployment exclusion
Does not qualify for stimulus as AGI is over $160k

Couple made $180,399 including $20K/spouse unemployment.
MAGI=$140,399?
Taxable Income=$159,999?
Qualifies for $20.4K unemployment exclusion, stimulus
Correct- very reduced stimulus (a few dollars at most)

Couple made $190,399 including $20K/spouse unemployment.
MAGI=$150,399?
Taxable Income=$190,399?
Does not qualify for unemployment exclusion, stimulus
Correct- no UI deduction, no stimulus

Offline Dan

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Re: Coronavirus Stimulus Aid Package
« Reply #1211 on: March 24, 2021, 01:23:21 PM »
Bah, so getting $10.2K unemployment puts you over $150K for stimulus purposes (AGI) but not for tax free unemployment purposes (MAGI)?
Who thinks up this stuff anyway?
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Re: Coronavirus Stimulus Aid Package
« Reply #1212 on: March 24, 2021, 01:25:16 PM »
Who thinks up this stuff anyway?
Politicians and beaurocrats.
Feelings don't care about your facts

Offline yos9694

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Re: Coronavirus Stimulus Aid Package
« Reply #1213 on: March 24, 2021, 01:25:40 PM »
Bah, so getting $10.2K unemployment puts you over $150K for stimulus purposes (AGI) but not for tax free unemployment purposes (MAGI)?
Who thinks up this stuff anyway?

No one. They write these things up one at a time and then analysts come in after the fact to calculate the implications

Offline shapsam

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Re: Coronavirus Stimulus Aid Package
« Reply #1214 on: March 24, 2021, 01:26:23 PM »
Bah, so getting $10.2K unemployment puts you over $150K for stimulus purposes (AGI) but not for tax free unemployment purposes (MAGI)?
Who thinks up this stuff anyway?
No, the first $10.2k of unemployment is not counted as taxable income at all.

Offline Dan

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Re: Coronavirus Stimulus Aid Package
« Reply #1215 on: March 24, 2021, 01:28:31 PM »
No, the first $10.2k of unemployment is not counted as taxable income at all.
That's only if MAGI is under $150K, no?
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Re: Coronavirus Stimulus Aid Package
« Reply #1216 on: March 24, 2021, 01:29:51 PM »
Bah, so getting $10.2K unemployment puts you over $150K for stimulus purposes (AGI) but not for tax free unemployment purposes (MAGI)?
Who thinks up this stuff anyway?
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

Offline Dan

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Re: Coronavirus Stimulus Aid Package
« Reply #1217 on: March 24, 2021, 01:39:33 PM »
I have a headache. Very happy not to be an accountant.
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Offline etech0

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Re: Coronavirus Stimulus Aid Package
« Reply #1218 on: March 24, 2021, 01:41:42 PM »
I have a headache. Very happy not to be an accountant.
2020: Glad I'm not a doctor.
2021: Glad I'm not an accountant.
Workflowy. You won't know what you're missing until you try it.

Offline AsherO

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Re: Coronavirus Stimulus Aid Package
« Reply #1219 on: March 24, 2021, 01:45:46 PM »
I have a headache. Very happy not to be an accountant.

And that’s you, with an MBA. Imagine a layperson or beginner bookkeeper.
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