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Normally at this time of tax season the IRS has less than 2 million unprocessed tax returns. Reports indicate that the IRS currently has about 7 million 2020 unprocessed tax returns, many of which were filed when tax season opened in February which are trying to claim additional Recovery Rebate Credits. Golly, Gosh and they still have 6 million 2019 unprocessed tax returns. I guess they don't know about the "rule of holes" "When you're in a hole stop digging"

E-file treatment of UI is the subject of this (Tuesday) afternoon's "production call" conference of IRS MeF software developers, transmitters AND states; so I'd anticipate ATX and others' rollouts to ensue shortly afterwards. Note too that this topic was announced a week ago; its treatment has been in the works a good while since the legislation emerged.

Rita, I recently lost my Dad at 99 and at his funeral eulogy I quoted from Billy Graham who once said " At some point you will hear that I have died, don't believe it, I have only changed addresses." May the Lord bless you and your family.

Check the Corona related box near the bottom of the 1099R input. That will put the amount on 8915-E and eliminate the penalty. The fiduciary probably coded it correctly. As far as it knew, there were no exceptions. If it wasn't covid related and an exception applied, fill out the 5329 and list the exception.

Did not notice the change in posters - I have had clients tell me stupid stuff and then I have to tell them something they don't want to hear.

Thank you, everyone. Mother was 97, and she has moved to heaven. I am so happy for her. Thank you all, again, for your prayers and kindness!

Pretty sure that post was a joke as it wasn't made by the OP.

Never! I'd be shocked, really shocked!

Yes Drake has updated their software but only for the Federal. I have an issue where here in California Unemployment is not taxed therefore an adjustment is made, now with the adjusted federal AGI it's as if though California is being adjusted again for the 10,200. As was stated earlier you are going to have to watch your state returns very carefully.

You aren't overthinking it. That is exactly what is currently happening on the DE returns in Drake at the moment. DE starts with Fed AGI and makes modifications, so since DE decided to make UI N/T for 2020 I'm having to override the DE subtraction to be -0- if UI is N/T in its entirety on the Federal, or to override so that the DE subtraction is the amount over $10,200 that is still taxed on the Federal return.

Maybe the class is eating most of your bandwidth.

Drake has updated their software with the UCE worksheet and my understanding is kaput!

But.... DON'T ANNOUNCE AN EXTENSION! ermagerd

Perhaps she had a guilty conscience and had a uncontrollable impulse to confess ? Sometimes clients do crazy stuff!

I said that I was not going to reply to this post but your points are well taken. Also, every other year I get a credit car with 18 months interest free. I got a credit card in November 2018 and the last month for me to pay the balance was April 2020. I ordered ATX 2018 software and I also ATX 2019 software (along with other office supplies) using that credit card with the hopes that I was going to pay off the balance in April 2020, but in March my business was shut down by the government so my income was near 0 in April 2020. I was affected on that angle too. So even though my income was spread out, I was affected. Notice that each case has its own merit so just by looking to the fact that I made the same amount of money (as you stated it) doesn't mean that I didn't get affected. Again, just spending $5 dollars in masks it is a burden caused by Covid-19 and the regulations (as correctly stated by DANRVAN) don't specify a dollar amount and that' why someone would argue that spending $5 dollars in mask grants withdrawing $100K from 401k and paying 0 penalty. What we are getting out of this thread is that we need to listen to our clients and see if they meeting the loosely criteria of the regulations.

As you know, Rita's mother recently went to Hospice Care. "Mom" went to Heaven a little while ago. It was very Peaceful and we are thankful. She approved my posting this. Please keep her and her family in your prayers. Thanks, Love and Blessings...

Hugs back to you. Know that we are here grieving with you.

Just a bit of follow up to my original post on the early IRA withdrawal. Clients readily admit that distribution was not Covid related and had based their decision on assurance from financial advisor that there would be no penalty. There is a bit of irony in that if they had taken funds from the wife's IRA it wouldn't have been an issue as she is over 59 1/2. To their credit, they have kept emails from advisor of this assurance and to the advisor's credit they have said that if indeed this is not Covid related they will reimburse my clients for the $5K penalty incurred. This topic has stirred some very interesting and thought provoking discussion.

The use of a code "1" in box 7 does not preclude you from using any of the tax penalty exceptions. A code 1 is probably misused on tens of thousands of 1099 Rs every year!

I wouldn't think about paper filing even if it takes a month for the update.

Tom, The square appointments is easy to setup and is also easy to manage. During the setup, I set the hours that I am normally open for business. Also included in the setup are the services I offer and the time normally allotted for that particular service. I list whether it is a drop off, review and pickup, individual return, consultation, etc. None of my business clients use it nor any rental enterprise partnerships that I have. But, for individuals it works great. I can also block out a time when I'm not available for anything personal. Example; I have to go to my daughter's in Delaware one weekend. This will only be a two day trip over a weekend so I am only closing for one day. I don't take walk-ins only appointments and this works great. Client's can also pay through the square appointments. I don't use that feature cause I never know exactly what they are bringing me. Hope this helps. '

Important Information Regarding 2020 Virginia Income Tax Returns: Virginia's Conformity to the Internal Revenue Code Advanced to Dec. 31, 2020 Under emergency legislation enacted by the 2021 General Assembly, Virginia's date of conformity to the terms of the Internal Revenue Code advances from Dec. 31, 2019, to Dec. 31, 2020. This allows Virginia to generally conform to the Coronavirus Aid, Relief and Economic Security (CARES) Act and the Consolidated Appropriations Act (CAA). However, it specifically deconforms from three provisions of the CARES Act that temporarily change limitations applicable to the net operating loss deduction, excess business losses and the business interest deduction. This legislation also deconforms from the provision of the CAA that permanently reduces the medical expense deduction threshold. The legislation conforms to the federal tax exemption for Paycheck Protection Program (PPP) loan forgiveness and certain funding received under the Economic Injury Disaster Loan (EIDL) program. However, it partially deconforms from the provision of the CAA that allows taxpayers to claim a federal deduction for business expenses funded by forgiven PPP loan proceeds. Instead, the bill permits a deduction for Taxable Year 2020 of up to $100,000 for business expenses funded by forgiven PPP loan proceeds. In addition, the legislation fully deconforms from the provision of the CAA that allows taxpayers to claim a federal deduction for business expenses funded by certain EIDL funding proceeds. The legislation also provides an individual and corporate income tax subtraction for Taxable Year 2020 for up to $100,000 of all grant funds received by a taxpayer under the Rebuild Virginia program. Tax Bulletin 21-4 explains the conformity adjustments that may be necessary as a result of this legislation. View the Tax Bulletin

Taxpayer withdrew $100K from his 401K without penalty due to COVID and chooses to spread out for 3 years. He also has $21K in unemployment compensation. Without the deferral his income is over $150K with the deferral of $33K he is under $150K. Does he qualify to use the $10,200 deduction?

Has not been created yet. I think the IRS just released the form and instructions to the software community on Friday. Tom Modesto, CA

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.

We better watch these states, everybody. Don't double dip! VA is very slow to act on anything.

You really think a client would actually do something like that

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

I'm sorry for your loss and I'm sure, as many here have said, you were a wonderful comfort to her.

"The IRS strongly urges taxpayers not to file amended returns related to the new legislative provisions or take other unnecessary steps at this time. The IRS will provide taxpayers with additional guidance on those provisions that could affect their 2020 tax return, including the retroactive provision that makes the first $10,200 of 2020 unemployment benefits nontaxable. For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return. For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance." …

So deeply sorry for Rita's loss. Prayers of comfort for her and her family.

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

Yes....it would....and it would break them. I for one would like to see it happen. Tom Modesto, CA

But wouldn't it be fun if everybody amended their returns right this minute?

It's a tough thing. I went thru it 7 years ago. It's still tough.

Sorry your loss Rita, my condolences to the entire family.

I am so sorry for your loss, Rita. Losing your mom is so hard. Sending prayers and hugs to you and your family. Bonnie

May the thoughts and memories of your mother offer you some comfort.

So sorry for your loss Rita and family. You’ve been a good daughter and great comfort to Mom.

Sincere condolences !

Hugs and condolences, Rita!

Sincere condolences to Rita and her family. May her Mom rest in peace.

Rita, I am deeply sorry for your loss. My deepest sympathy to you and your family.

Rita, I am sorry for your loss. Love and peace to your family.

Rita, my prayers are with you and your family.

Oh Rita, I'm so sorry. May her memory be for a blessing.

I am so sorry to hear of Rita's loss. Tax season is stressful enough without the added stress of losing a loved one. Please convey my deepest sympathy to Rita.

My prayers for Rita and her family for such a big loss.

Thank you for the update, Possi. @RitaB, I am so very sorry for your loss and will definitely have you and your family in my prayers.