/1/21 Dor Completes Review Of Returns Filed Before Unemployment Deduction Legislation Passed
DOR has reviewed all 2020 individual income tax returns filed on or before April 9 that included unemployment income.
- Adjustments have been made and refunds have been issued for returns that we determined were eligible for a refund. If you believe you received a refund in error, please contact us at 887-6367 before taking any action. Note that simply not cashing the check will not resolve the problem.
- Today we will begin sending notices to those we determined were not eligible for the Massachusetts unemployment deduction based on their income. Review the eligibility rules and deduction calculation using our Unemployment Deduction Worksheet. Anyone who receives a notice, but believes they are in fact eligible for a deduction, is asked to contact DOR at 887-6367.
- Learn more about the Massachusetts Unemployment Income Deduction on our FAQ page.
Unemployment Compensation Exclusion Worksheet Schedule 1 Line 8
a. Yes. Stop You cant exclude any of your employment compensationb. No. Go to line 8
Which Turbotax Is Best For You
Figuring out all these specifics can be stressful. But doing your income taxes doesnt need to be, when you use TurboTax Online.
However, if you do feel a bit overwhelmed, consider TurboTax Live Assist & Review and get unlimited help and advice from a real person as you do your taxes. Plus, theres a final review before you file. Or, choose TurboTax Live Full Service and have one of our tax experts do you return from start to finish.
With more than 20 years experience helping Canadians file their taxes confidently and get all the money they deserve, TurboTax products, including TurboTax Free, are available at www.turbotax.ca.
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/21/21 New Webpage Highlights Differences Between Massachusetts And Federal Tax Law
As many of you know, Massachusetts generally follows the Internal Revenue Code as of January 1, 2005 for personal income tax. When the federal tax law changes, taxpayers may need to adjust federal amounts when filing their Massachusetts return. Weve recently posted a new webpage that will help you identify many of the common differences between Massachusetts and federal tax law. Comments and suggested additions to the page may be sent to .
How Does Turbotax Live Full Service Actually Work
Once you register for the service, you will be matched up with an appropriate tax professional with TurboTax. All you need to do is upload or import your tax documents into the platform. This will be done securely to ensure your personal and financial information is not compromised.
After you have uploaded everything, your tax professional will answer any questions and get on with the work of preparing and filing your taxes on your behalf.
Here is a brief rundown of the steps involved and how this service can benefit you.
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Whats The Earliest I Can Get My Tax Refund
When you file your return electronically with Turbo Tax, you will get your refund the fastest way possible, guaranteed. The IRS issued more than 9 out of 10 refunds in less than 21 days last year and expects the same results this year
Once the IRS has accepted your return, you will receive an email to confirm this, and then you can track your return online or via the TurboTax mobile app so you can know when to expect your funds to be deposited into your bank account.
How Do I Know If I Am Now Eligible For Additional Deductions And Credits And What Do I Do To Get Them
Its a bit tricky.
The IRS will adjust your return and the amounts for any deductions and credits you claimed on it. For example, say you claimed the Earned Income Tax Credit on your return. And because the new unemployment exclusion changed your income level, you would now be eligible for an increase in EITC amount. The IRS would adjust your return for you and send you the additional refund amount with your additional unemployment benefits. You are all set.
The IRS is also making corrections to Earned Income Tax Credit, Premium Tax Credit and the Recovery Rebate Credit since taxpayers may be eligible for these credits with the $10,200 income exclusion.
However, say you were not originally eligible for the EITC on your return, but now, because the exclusion changed your income, you are eligible for the EITC. You may need to amend your return to claim that new credit based on your tax situation:
- The IRS can adjust tax returns for those who are single with no children and the exclusion makes them eligible for EITC.
- Taxpayers who have qualifying children and become eligible for any new benefits once the exclusion is calculated may have to file an amended tax return to claim new benefits.
If you chose not to amend your return, youd only get the additionalunemployment benefits automatically from the IRS and would miss out on additional money youd be eligible for.
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How To Track Your Refund And Check Your Tax Transcript
The first way to get clues about your refund is to try the IRS online tracker applications: The Where’s My Refund tool can be accessed here. If you filed an amended return, you can check the Amended Return Status tool.
If those tools don’t provide information on the status of your unemployment tax refund, another way to see if the IRS processed your refund is by viewing your tax records online. You can also request a copy of your transcript by mail or through the IRS’ automated phone service by calling 1-800-908-9946.
Here’s how to check your tax transcript online:
1. Visit IRS.gov and log in to your account. If you haven’t opened an account with the IRS, this will take some time as you’ll have to take multiple steps to confirm your identity.
2. Once logged in to your account, you’ll see the Account Home page. Click View Tax Records.
3. On the next page, click the Get Transcript button.
4. Here you’ll see a drop-down menu asking the reason you need a transcript. Select Federal Tax and leave the Customer File Number field empty. Click the Go button.
5. The following page will show a Return Transcript, Records of Account Transcript, Account Transcript and Wage & IncomeTranscript for the last four years. You’ll want the 2020 Account Transcript.
6. This will open a PDF of your transcript: Focus on the Transactions section. What you’re looking for is an entry listed as Refund issued, and it should have a date in late May or June.
Taxes : 7 Upcoming Tax Law Changes
OVERVIEW
Tax Year 2021 will likely bring some surprises, but some of its changes are already planned. Here’s what you need to know about some of the planned phase-outs, changes and inflation adjustments the IRS will present for taxes in 2021.
For information on the third coronavirus relief package, please visit our American Rescue Plan: What Does it Mean for You and a Third Stimulus Check blog post.
Planning your finances provides several benefits. First and foremost, proper financial planning allows you to identify adjustments you can make to better prepare for the future. While no amount of planning can perfectly prepare you for what lies ahead, it can certainly give you the flexibility to respond appropriately.
Knowing about certain upcoming tax changes can lay the groundwork for planning your year ahead. As the new year begins, many people will want to understand which taxes will change in 2021 and what provisions will phase out or be adjusted for inflation. Here’s a high-level summary of some of the items that will change for taxes in 2021.
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Exceptions To Ei Repayment Requirements
In some cases, you may earn above the threshold and still not be required to repay any of your benefits. Most significantly, if you have not earned any EI income during the 10 previous years, you do not have to repay any of your benefits. For example, if you report EI payments for the 2020 tax year and have not reported EI payments for any of the 10 previous years, you do not have to repay any of your EI payments, regardless of how high your income.
However, if you reported EI payments in any year between 2009 and 2019, as well as 2020, you are required to repay a portion of your benefits if your net income exceeds the threshold.
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Expanded Child Tax Credit
Beginning in tax year 2021 the Child Tax Credit will be expanded. The bill increases the amount that families claiming the Child Tax Credit receive from $2,000 to:
- $3,600 for each child under 6
- $3,000 for each child age 6-17
The credit is now fully refundable that means that you are eligible for the credit even if you dont owe taxes.
Although this credit is for next years tax filings, payments will also be sent in advance, over the course of the year, beginning no earlier than July 2021 so people dont have to wait to file their 2021 taxes. The IRS will likely determine eligibility based on your most recent tax filing.
The American Rescue Plan passed the House today. The legislation still includes a $1,400 stimulus check for eligible Americans, expanded unemployment, and tax relief on unemployment benefits for households making under $150,000. The legislation will now go back to the President to be signed into law and we anticipate this will happen on Friday.
The American Rescue Plan passed the Senate today. As it stands today, the legislation agreement includes a $1,400 stimulus check for eligible Americans, expanded unemployment, and tax relief on unemployment benefits for households making under $150,000. The amended legislation will now go back to the House for passage before being sent to the President to be signed into law.
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/5/: Delay In Small Number Of E
On February 20, approximately 780 electronic returns were processed without an acknowledgement being sent out. This was an issue with DORs system, not any particular software vendor, and the returns were processed normally with refunds being issued if no additional review was required. If you did not receive an acknowledgement for a return filed around February 20, you can call our contact center at 617-887-6367 to verify that the return was received. Note that we expect the delayed acknowledgements to be issued shortly.
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What To Do If You Have Filed Already
If you collected unemployment insurance in 2020 but you already filed your tax return, you are still eligible for the exemption under the American Rescue Plan. You do not need to take any action to claim the money youre owed. Instead, the IRS will automatically refund the money.
The first round of payments will begin in May and continue over the summer, according to the IRS. Youll either receive a refund or the amount will be deducted from your taxes owed.
There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return, the agency noted in a recent release.
This includes, for example, taxpayers who claimed the Earned Income Tax Credit but are eligible for an increased credit under the new exemption. While youll automatically get a refund for the exemption, youll need to file an amended return to get a larger credit.
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Taxes : Start Planning Now
With these tax changes in 2021, you can take advantage by planning now. Don’t let opportunities like contributing more toward your retirement plan or participating in a health savings account pass you by. Contributing to these accounts can save you money for needs you have down the road and lower your tax bill today, no matter what 2021 brings.
Remember, with TurboTax, we’ll ask you simple questions about your life and help you fill out all the right tax forms. With TurboTax you can be confident your taxes are done right, from simple to complex tax returns, no matter what your situation.
How Will I Receive My Additional Unemployment Refund Amount From The Irs
The IRS will issue refunds resulting from this unemployment income relief by direct deposit for taxpayers who provided bank account information on their 2020 tax return.
If valid bank account information is not available, the refund will be mailed as a paper check to the address of record. The IRS will continue to send refunds until all identified tax returns have been reviewed and adjusted.
These refunds are subject to normal offset rules such as past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support or student loans. The IRS will send a separate notice to the taxpayer if the refund is offset to pay unpaid debts.
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About The Unemployment Compensation Exemption
The American Rescue Plan Act, which was enacted in March, exempts up to $10,200 of unemployment benefits received in 2020 from federal income tax for households reporting an adjusted gross income less than $150,000 on their 2020 tax return. If you received more than $10,200 in unemployment compensation last year, any amount over $10,200 is still taxable.
The IRS has identified over 10 million people who filed their tax returns before the plan became law and is reviewing those returns to determine the correct amount of tax on their unemployment compensation. For those affected, this could result in a refund, a reduced tax bill, or no change at all.
The IRS started recalculating impacted tax returns with returns from single taxpayers who had relatively simple returns, such as those filed by people who didn’t claim children as dependents or any refundable tax credits. The tax agency then shifted to joint returns filed by married couples who are eligible for an exemption up to $20,400 and others with more complex returns.
Remember, though, that the tax exemption only applies to unemployment benefits received in 2020. So, if you receive unemployment compensation in 2021 or beyond, expect to pay federal tax on the amount you get.
How Do I Claim The Arpa Unemployment Benefits In Turbotax
As part of the recently passed American Rescue Plan, the first $10,200 worth of unemployment payments may now be tax-free for a person with an annual modified adjusted gross income of less than $150,000. This expanded tax relief begins this year, starting for taxpayers filing returns after January 1, 2020.
If you havent filed your return yet, go ahead and do so. TurboTax is up-to-date with the latest federal changes. Check your states updates here.
If youve already filed your return, the IRS says you dont need to do anything to take advantage of this benefit. Theyve assured us theres no faster way to get any additional money you are owed. In fact, amending your return could delay your payment. Each state, however, is handling this differently. Go here to check if you should amend your state return to claim the unemployment benefits.
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What Else To Know About Unemployment Tax Refunds
The IRS has provided some information on its website about taxes and unemployment compensation. But weâre still unclear on the exact timeline for payments, which banks get direct deposits first or who to contact at the IRS if thereâs a problem with your refund.
Some states, but not all, are adopting the unemployment exemption for 2020 state income tax returns. Because some get full tax unemployment benefits and others donât, you might have to do some digging to see if the unemployment tax break will apply to your state income taxes. This chart by the tax preparation service H& R Block could give some clues, along with this state-by-state guide by Kiplinger.
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Here is information about the child tax credit for up to $3,600 per child and details on who qualifies.
