TurboTax Unemployment Tax Waiver
Contents
TurboTax is always up to date with the latest tax changes. The unemployment tax break given to taxpayers who received unemployment compensation with a modified adjusted income of less than $150,000 is eligible for up to $10,200 tax break on this income earned.
When you file your federal income tax return on TurboTax, you’ll get these automatically handled if you received unemployment compensation and your MAGI is under the threshold. The income limit is the same regardless of filing status. A married couple filing a joint return gets the same income threshold as someone single. However, the exclusion isn’t $10,200. It’s doubled for married couples filing a joint return.
TurboTax Unemployment Tax Break Update
Since this new tax change is passed after the start of the tax season, some taxpayers may have filed their federal income tax returns already. In that case, there is either something you need to follow or not. It depends on when you filed and whether the Internal Revenue Service processed your tax return or not.
If you filed your 2024 tax return:
And you are a single filer; the Internal Revenue Service will adjust your tax return and automatically grant the $10,200 exclusion for unemployment compensation. You are expected to get your additional tax refund starting from May.
If you’re married filing a joint return, your refund will get to you a little bit later than May.
If you haven’t filed your 2024 tax return:
Claim the unemployment compensation exclusion for up to $20,400 if you’re filing a joint return or $10,200 if you’re a single filer.
Recently becoming eligible for the unemployment tax break
So you filed your tax return through TurboTax and became eligible for the unemployment compensation. Assuming you weren’t eligible for the tax break on your original return, you’ll need to amend your tax return and claim the unemployment tax break. Whether it’s $10,200 or $20,400, you must claim it on your amended tax return.
You cannot amend a federal income tax return electronically so you must prepare a paper tax return using Form 1040-X and mail it to the Internal Revenue Service. It generally takes between 6 to 8 weeks for the IRS to process amended tax returns which is roughly the amount you’ll get your tax refund.
OK, the 1040-X site says you can electronically file if you E-filed your original return. I filed through Turbo Tax electronically, does that qualify? Or is it the same situation where the IRS didn’t adjust my return automatically for the Unemployment Exclusion because it came though Turbo Tax?
Hi Lawrence,
If you’re wondering about your unemployment compensation, give it a couple of days. If you don’t receive your refund by the end of the next week, file 1040-X PDF online and print a paper copy to send it to the Internal Revenue Service. Form 1040-X cannot be filed electronically per IRS rules.