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Post your state about where they stand regarding taxing unemployment


Pacun
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  • Pacun changed the title to Post your state about where they stand regarding taxing unemployment

Is Connecticut income tax liability impacted by the exemption from income of the first $10,200 of unemployment compensation in the American Rescue Plan Act? (added 3/16/2021)

The starting point in determining an individual's Connecticut income tax liability is the individual's federal adjusted gross income. There are no Connecticut statutory modifications that require this new federal exemption amount to be added back on Connecticut's return. Therefore, the excluded amount is not subject to Connecticut income tax.
 

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I just received the following response from Kentucky DOR to an email I sent yesterday:

RE: Income Taxes

DOR WEB Response Individual Income Tax <KRC.WEBResponseIndividual@ky.gov>

9:40 AM (8 minutes ago)

to me

Kentucky has not adopted legislation at this time for the $10,200 of unemployment not being taxed. If that legislation is passed, it will be posted on our website. As of now the income will need to be added to your Kentucky return as taxable on the SCH M. Thank you.

Section Supervisor

Department of Revenue, Office of Income Taxation

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Sorry, I thought my posts would be helpful for some. Since they are not, I took my posts down. Everyone should check with his or her clients' states dept of revenue websites and states legislation to determine proper handling of the unemployment income.

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A call to GA left us none the better.

They tax unemployment, and as of today they are non-conforming. The topic is now in legislature. 

If we have a GA preparer here, would you please post and tag me? This client owes, and if I don't hear differently, I will push this through next week with full payment. I'll have to add back the unemployment to the GA return.

Thanks!

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20 hours ago, Pacun said:

VA and MD are not taxing at all unemployment received in 2020

VA doesn't tax unemployment at all, and I think it's been this for a long time.

MD is a new law, but has lower earnings limits (75k single, 100k MFJ & HOH) than the federal law, and it's a cliff.

https://www.marylandtaxes.gov/RELIEFAct/docs/Maryland-Unemployment-Assistance-FAQs-FINAL.pdf

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3 minutes ago, Slippery Pencil said:

Why not just use on of the many lists online that are updated on a regular basis

https://kb.drakesoftware.com/Site/Browse/17148/State-Conformity-to-ARP-Unemployment-Compensation

Yes, well, that is the post and chart that I took down after 2 people followed up and said that their states hadn't actually passed legislation yet but Drake's chart shows conflicting information. I checked one of the state's legislation in question, and sure enough, that state's bill had passed the senate but is still in the house committee at this time. 

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On 3/24/2021 at 1:57 PM, Abby Normal said:

VA doesn't tax unemployment at all, and I think it's been this for a long time.

That's correct, but it was showing it as a subtraction just like it always did when you input UEC via the 1099G, even if it was excluded on the 1040.  So you have to go in (per VA instructions) and show a positive figure for FDC additions, then when it subtracts it out, all is okay.  No software adjustment to the return is necessary.  This works because VA has NOT advanced FDC beyond 12/31/20.  

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Just posted from Massachusetts:   (other info at mass dot gov / dor and then click on the FAQs section)

Does Massachusetts allow a deduction for unemployment income?

As a result of a recent state law change, taxpayers with household income not more than 200% of the federal poverty level may deduct up to $10,200 of unemployment benefits from their taxable income on their 2020 and 2021 tax returns for each eligible individual. Federal law allows a deduction of up to $10,200 if the taxpayer’s federal adjusted gross income is less than $150,000. Since the Massachusetts income threshold is different from the federal income threshold, some taxpayers may be eligible for a deduction on their federal tax return but not on their Massachusetts tax return.  

See chart below for income limits based on 200% of the federal poverty level.

# Persons in the Family/Household      200% of the Federal Poverty Level

1    $25,520

2    $34,480

3    $43,440

4    $52,400

5    $61,360

6    $70,320

7    $79,280

8    $88,240

For families /households with more than 8 persons, add $8,960 for each additional person.

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