Bill passed by Senate yesterday exempts 1st $10,200 of UI

Now back to the House. I would speculate that the UI exemption has a good chance at being included in the final bill...

https://www.newsmax.com/headline/covid- ... d/1012769/

Would this apply to 2020 UI or begin in 2021?

I've just spent the past 20 minutes in the senate.gov website, and the newest stuff I can find is March 4.

If Nilodop is reading this, I'm curious as to how you are searching, or what you are searching, to get the results you get. You seem to have a skill I'm missing.

From the *context* of what I've read, I can't believe it won't cover 2020. But... this is Congress...

It's 2020. Appears to be ONLY 2020. Lord, help us...

https://www.cnbc.com/2021/03/05/unemplo ... of-ui.html

If Nilodop is reading this, I'm curious as to how you are searching, or what you are searching, to get the results you get. You seem to have a skill I'm missing.

My CRD gets all the credit. (Crack Research Department).

Does smoking crack really help in doing research?

There are some side affects effects your team should consider.

See #32 in this discussion:
viewtopic.php?f=8&t=20982

I've done plenty of returns (not sure on the number) that have unemployment. Can't wait for the phone calls from clients while I'm up against the April 15th deadline. Way to go Congress!

How is this going to "work" before an April 15 deadline? IRS has to update their software, our tax software has to be updated, what about the states that tax UI, are they changing their tax code as well?

"Pres Biden aims to sign the legislation in time to beat a Sunday deadline to renew unemployment aid programs."

That means there's just a month's time to update all tax software, including that of the IRS and all states, before the 4/15 deadline.

Excellent questions. We don't know the answers.

"BUSINESS NEWS"
MARCH 8, 2021 9:32 AM UPDATED A DAY AGO
U.S. House Democrats demand IRS to extend tax filing deadline to July 15.

"Ways and Means Democrats said that, as of the end of February, the number of returns filed was down by nearly 25% from last year at the same time, and the number of returns processed by the IRS was down by 31%."

...
Ways and Means Democrats said that, as of the end of February, the number of returns filed was down by nearly 25% from last year at the same time, and the number of returns processed by the IRS was down by 31%."

And the number of tax professionals finishing their nights with liquor up by 98%.

I am 78 and self employed. Never applied for unemployment as among other reasons doubt I would be eligible. I got a fraudulent 1099G for unemployment comp of $10,200.00 in 2020. Reported fraud to Ohio Unemployment Comp agency. I guess I don't have to worry about taxes on that that now. But how did someone know that exact amount of $10,200 was not going to be taxed for 2020?

Tax Season will have to be extended imo, whatta mess, I wonder how many calls Drake and all are receiving ..........

But how did someone know that exact amount of $10,200 was not going to be taxed for 2020?

From the bill that was proposed by ? on ?

Is it possible that happens to be a cap for Ohio? California's is something close to that, but I don't know how the added Federal weekly benefit affected the cap.

For what it's worth, the text of the March 6 version of House of Representatives Bill 1319 (H.R. 1319, the proposed American Rescue Plan Act of 2021), as amended and passed by the Senate on Saturday, March 6, has finally been posted at congress dot gov.

Regarding the issue about the $10,200, here is the text from section 9042 of this March 6 version of the bill:

SEC. 9042. SUSPENSION OF TAX ON PORTION OF UNEMPLOYMENT COMPENSATION.

(a) IN GENERAL.—Section 85 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

‘‘(c) SPECIAL RULE FOR 2020.—

‘‘(1) IN GENERAL.—In the case of any taxable year beginning in 2020, if the adjusted gross income of the taxpayer for such taxable year is less than $150,000, the gross income of such taxpayer shall not include so much of the unemployment compensation received by such taxpayer (or, in the case of a joint return, received by each spouse) as does not exceed $10,200.

‘‘(2) APPLICATION.—For purposes of paragraph (1), the adjusted gross income of the taxpayer shall be determined—

‘‘(A) after application of sections 86, 135, 137, 219, 221, 222, and 469, and

‘‘(B) without regard to this section.’’.

[ . . . ]

(c) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 2019.

See:
https://www.congress.gov/117/bills/hr13 ... 319eas.pdf

This is from the Senate's "engrossed bill" -- apparently the bill that was sent from the Senate back to the House of Representatives. Word on the street is that the House will probably pass this version without any further amendments. If so, an "enrolled bill" version would be sent to the President.

Based on this text, it does appear that this provision -- amending Internal Revenue Code section 85 -- although drafted to be effective for tax years that begin after December 31, 2019, would usually apply only to tax year (calendar year) 2020 (because of the wording of section 85(c)(1) as it would be worded after amendment by section 9042 of the bill).

Of course, in the rare situation where an individual is using a fiscal year other than the calendar year (for example, February 1, 2020 through January 31, 2021), a portion of the calendar year 2021 unemployment compensation could be covered by the proposed bill. During over 40 years of experience preparing thousands of U.S. Federal income tax returns, I believe I've seen a non-calendar fiscal year on a Form 1040 only once.

how did someone know that exact amount of $10,200 was not going to be taxed for 2020?

They didn't. That's called a coincidence.

hope just extend it to May 15, not to 7/15, ruin tax prof's summer vacation

Bill just passed- who has read it and can give me an update