Last week I sent everyone an updated email outlining the expected timeframe for the new calculation changes for the $10,200 Unemployment expenses and have some new information that is extremely important for you to understand and to read.
Many of you have been calling in regarding the IRS Worksheet they mentioned on their website, also been referring to other software manufacturers such as TurboTax implementing the changes based on the worksheet. I specifically told everyone to hold off on all these types of returns because we have been waiting for the IRS to fix everything at the e-file center.
The IRS has confirmed that the Worksheet and calculation "workarounds" that have been released were for Paper Filing Returns ONLY!!
By March 29, 2021, we will have the software updated to ensure these calculations are based on IRS e-filing guidance and are auto-calculated.
The majority of tax returns filed using our software are e-filed rather than paper filings. We want you to be aware the recently released IRS guidance for handling unemployment compensations due to the American Rescue Plan Act of 2021 changes are for paper filings, not those who choose to e-file.
We have chosen not to provide you with workarounds and manual calculations to input the pertinent data into your tax preparation filing software. These workarounds would be drawn from recently released IRS guidance for paper filings and possibly cause rework at a later date.
On top of all of this, the IRS has still said to not e-file any Amended returns regarding this issue because they are now in the process of just possibly sending out a check to everyone instead of requiring an Amended tax return to be filed.
With all of that being said.. what are your options?
- We still strongly advise you to be patient and wait until the official updates have been made within our software and at the IRS level for e-filing the returns that haven't been filed yet
- IF you, or your customer, simply can't wait then you can take the chance and file the return as is, and they will have to deal with whatever decision the IRS makes on how to get the missing money they are hoping to receive based on those tax exclusions.
As a Tax Preparer, it is your job to guide your clients into making the best decisions for them and their needs. We all know and understand some people simply just need money now. However, it's up to you to make the best judgment call for your clients and helping them make the correct decisions.
