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There is supposed to be a worksheet created that will start with the amount received that will calculate the nontaxable and taxable portions, so I think we will enter the amounts shown on the 1099G for gross unemployment and tax withheld and let the software go through its calcuations. This is one more reason to wait for the software update besides the fact that the nontaxable portion will be an add-back for other calculations on the return.

Fast, quick or quickly? Fast and quick mean moving with great speed. Fast is both an adjective and an adverb. Quick is an adjective and the adverb form is quickly. Compare It was a fast train. We need to have a quick chat before the meeting. Fast and quick are adjectives. You walk very fast! Not: … very fastly. We should do it as quickly as possible. Fast and quickly are adverbs. https://dictionary.cambridge.org/us/grammar/british-grammar/fast-quick-or-quickly

They will never figure out this rat's nest. Like I said just the other day, "Hold my beer and watch THIS!" LOL

You really think a client would actually do something like that

Agree, a lot of crazy and unfair stuff, but I don't get to decide tax benefits based on that.

The IRS has not posted any "regulations". The authority comes from the Cares Act and the IRS notice referred to above. The penalty exception and "three year rule" are allowed in specific cases only. Unfortunately, there is no exception for an individual laid off prior to the pandemic and who could not find new employment because jobs were not available. However, he could qualify if was unable to work because of quarantine, unable to find child care, a job offer rescinded or start date for a job delayed due to COVID-19. If you have read a source that says differently please post it here.

If her spouse was alive during 2020, the surviving spouse gets the full EIP1 and EIP2.

Really.

You are too fast... lol. I didn't read your previous post before posting... then I corrected it but you drew faster.

Here's an issue with reducing "other income" by the unemployment reduction... Many states, mine included, already do not tax unemployment. If I reduce my AGI by any other means than negating it as unemployment, (on the unemployment LINE), I will create a double-dip on the state requiring me to adjust the state to add it back to my AGI. I need to call the WAAAAAmbulence

Never! I'd be shocked, really shocked!

I'm not sure the IRS has released that yet.

Plot twist: She actually wrote the check on 1/2 and backdated them to 12/30.

It would seem to me that what you have is not a tax issue but a legal question regarding the fiduciary responsibilities of a trustee. This is why I keep my involvement with trusts to an absolute minimum. Too many trustees don't understand their attorney and as a result are reluctant to ask the attorney questions, then end up winging it and then assume we as accountants will just fix whatever. Then when you ask questions about problems etc, their eyes glaze over.

in her checkbook after she subtracts the checks she just wrote 12/30/20, plus the savings, cash, etc.

I guess my brain is to feeble to wrap my head around tax legalese. Perhaps that's why the very best tax experts are in such high demand. I always suspected that it is written this way on purpose. It's job security for the talented.

So you wouldn't allow me to not pay penalty based on the fact that I lost $60 and took out $100K from my 401k? That's the way I interpret the law (I am not required to pay penalty). How about my wife? She collected unemployment because she was affected by the covd-19 virus and she couldn't go to work because her restaurant closed for 3 months. She used to make $300 a week and unemployment gave her $1000 every week. Was she affected by covid? was I affected by covid? Who are we (tax preparers) to decide how she felt in quarantine without walking to work, without interacting with her co-workers? Just wearing a mask is a burden on people so don't come and tell me that Covid-19 didn't affect most people. Prior to Covid, I have only seen 2 people wearing masks in my whole life while they robbed. I know some of you love the fact that you are now wearing a mask but I guarantee you that you will NOT be wearing it in a couple of years. Again, everything is subjective and I guess that's why there is a wording on the instructions that the tax payer auto certifies that he was affected by covid.

Click on the green arrow on Line 26, choose Ln26-Est Tax.

My thoughts were that tp liquidated account therefore tp does not have balance in there.

It's not fixed because they know we could input 00-0000000 instead of a real number, and it would go through

Well that makes as much sense as the instructions for UI benefits! Maybe we can't blame the lawyers who write the laws when the English language is not consistent.

I agree with Possi. Let's wait for the update to be properly added to the software.

The way they've handed out money to profitable businesses, I'd call a hangnail qualified. If it's questioned, it's questioned. But the quotes seem to leave a lot to a judgement call on the individual.

Use the procedures in this thread or wait for your software to update.

'Quickly' is an adverb and yes too many people use grammar incorrectly, dropping the '-ly' way too often, such as in 'Drive safe.'

Earlier versions of the law used the word 'household' when referring to the 150k income limit, and I was searching for where they defined 'household.' Now I see they've changed it to 'taxpayer,' and that raises the question of whether that will mean 300k on a joint return. My guess is no, but it makes clear that MFS will help some people this year, even if the MFS rule makes the income limit 75k.

A W-2G is only issued for payouts that exceed $1200. There are going to be quite a few into the several hundreds. Imagine how much time it will take to enter all of those. If it were my client I would put them on extension and when the transcripts come out in late May, paper file the return. If you get the Summary transcript, you won't even have to add them up. I found a shortcut to entering the W-2G's. The only items that need to be entered are the Winnings, Date, and Type of bet (slots, poker, etc). and back up withholding, if there is any. (it is 24% for slots, bingo, keno for payouts of $5000+; for anything else, the withholding starts at $600) You can bet this one gets audited.

I read it as excluded from gross income if your AGI is below 150k. And your AGI is your AGI before they performed this magic stunt. That is why, per IRS instructions, putting the exclusion amount as a negative on line 8 of sch 1 can work.

In this case it is not the intent of the distribution that matters. What matters is if he, his spouse, his dependent or a household member was affected physically or economically by Covid-19. If he qualifies for auto certifying that he, his spouse, dependent or household member was affected by covid, he can pay tax 1/3 each year. If he is was 55 last year, then he doesn't have to pay penalty because he separated from service.

If unemployment reduces the salary and now some people will qualify for EIC, I doubt the IRS will do anything and we will have to amend.

Possi & and Tom, you have a very sick sense of humor

Yes...account was opened in 2003. I wanted to confirm my understanding was correct, that since basis was more than the distribution it was non-taxable even though she is below 59 1/2. Thank you, Lynn.

Gee, it must have the ghost gremlins that put the number on the W 2