Menu

Search

Knowledge Base


17148: State Conformity to ARP & Unemployment Compensation


State Returns Generally

What states are conforming to or decoupling from the unemployment compensation exclusion?


The following chart summarizes the known state responses to the provisions of the American Rescue Plan Act of 2021, unemployment compensation exclusion (UCE). Additional information will be added as it becomes available. You should review the state specific instructions or website if you have additional questions about the conformity listed below. 

State Conforming to UCE? Taxed Unemployment Compensation (prior to ARP)? Notes
AK N/A
AL N/A No
AR N/A No ARSB236 signed into law 03/02 states that Unemployment is not taxable
AZ Undecided Yes Message page - A checkbox has been added to the AZ Screen 1, to allow returns to follow the federal ARPA and exclude up to 10,200 of unemployment and still E-file. AZ has not yet made a decision if they will conform. Returns filed with the exclusion of unemployment will need to be amended if AZ does not conform to the ARPA.
CA
Decoupling
No Generally conforms with the IRS. This is listed as decoupling because they do not ever tax UE.
CO
Decoupling
Yes https://tax.colorado.gov/press-release/colorado-provides-guidance-on-american-rescue-plan-related-to-taxable-ui-benefits
CT Conforming Yes
DC Conforming Yes
DE
Conforming
No
GA Decoupling Yes
HI Decoupling Yes
IA Conforming Yes
ID
Decoupling
Yes Message page until update is implemented.
Idaho unemployment insurance benefits are taxable by Idaho and should be included in Idaho income when filing 2020 Idaho income tax returns. Any unemployment benefits deducted on federal Form 1040, Schedule 1, line 8, should be added back to the Idaho return as follows:
If filing Form 40, report the income on Form 39R, Part A, line 6, “Other Additions.”
If filing Form 43, don’t include the federal unemployment insurance exclusion on line 19, “Other Income.” Report the exclusion amount on Form 39NR, Part A, line 4, Column A, “Other Additions.”
IL
Conforming
Yes IL.gov
IN Decoupling Yes Conformity bill is under consideration
KS
Conforming
Yes
KY Decoupling Yes Kentucky adopts the IRC in effect on 12/31/2018. UCE will be added back on KY Schedule M, Line 5, for resident filers and will be not be included on form 740NP, page 4, Col B, Line 16 for non-resident and part-year resident filers.
LA
Conforming
Yes
MA
See notes
Yes MAWK_UEC calculates the allowable MA deduction. Mass.gov
MD
Conforming
Yes Message page prevents e-file on all returns until further notice. 
ME
Conforming
Yes Message page all unemployment returns until law is passed.
MI
Conforming
Yes
MI City
Conforming
No Adjust exclusion for federal UCE
MI DT
Conforming
No Adjust exclusion for federal UCE
MN
Decoupling
Yes Addback on form (waiting on changes)
MO
Conforming
Yes
KCMO
Conforming
Yes
MS
Decoupling
Yes
MT
Conforming
No
NC Decoupling Yes Update (3/27/21) adds the federal UCE back to line 7 of NC D-400. 
ND
Conforming
NE Conforming Yes
NH N/A No
NJ
Decoupling
No
NM Conforming Yes Traditionally conforming, but no guidance has been given yet
NY Decoupling Yes The Unemployment Compensation Exclusion Addback (UCE Addback) will be included on line 1 of Form IT-558, New York State Adjustments due to Decoupling from the IRC, using code A-011. Form IT-558 is named NY558 in our software. The software will automatically compute the UCE Addback and report it using code A-011 on line 1 of the NY558.
EF Message 0721 will no longer be generated when unemployment has been excluded from federal AGI.
NYC N/A
OH
Conforming
Yes See the OH 1040 Instructions, page 6 in the section: What is Modified Adjusted Gross Income?
OH CITY N/A No
OH RITA N/A No
OK
Conforming
Yes
OR Conforming Yes (No if work was performed on Indian reservation)
PA N/A No
PH N/A No
RI Decoupling Yes UCE should be added back on RI Schedule M, Lines 2g (new line).
SC Decoupling Yes Conformity bill is under consideration
TN N/A N/A
TX N/A N/A
UT
Conforming
Yes
VA Decoupling No
VT
Conforming
Yes
WI
Decoupling
Yes Line 22, "Other adjustments," of Schedule M, Additions to and Subtractions from income, will now disregard any unemployment compensation exclusion amount on line 8, "Other income," of federal Schedule 1, Additional Income and Adjustments to income.
WV Conforming Yes Drake20 Update expected 4/15/21-- With the passage of SB 693, WV has conformed with the exclusion of the first $10,200 of unemployment compensation. New original returns will be permitted to exclude up to $10,200 of unemployment compensation from the federal adjusted gross income to match the FAGI on the federal return. The 1099-G should be submitted (MeF) or attached (if paper filed) to support the claim.

WV returns that were filed prior to the passage of SB 693 should have included the UC on Schedule M line 53 as an increasing modification. Amended returns being filed to exclude the unemployment compensation will need to supply the corresponding 1099-G reflecting the amount of exclusion. Amended returns may be filed electronically or by paper.

N/A indicates that the federal law is not applicable. No information at this time indicates that the state has not confirmed whether they are decoupling or conforming to federal law.


Related Links


Also In This Category


Details
Article has been viewed 79K times.
Last Modified: 2 days ago @ 7:31 PM
Options