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17149: 2021 March Broadcasts - American Rescue Plan Updates


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2021 March Broadcasts - American Rescue Plan Updates

See Related Links below for more information and other details about the changes mentioned in these broadcasts.


Drake Software Broadcast Center
Pending Legislation Broadcast Released 03.10.2021

The President is expected to sign a bill this week which will provide relief for the continued impact of COVID-19. The American Rescue Plan Act of 2021 extends unemployment benefits, provides funding for state and local governments, supports vaccine rollouts, expands the child tax credit, makes a portion of unemployment compensation nontaxable for certain filers, and gives many Americans an additional Economic Impact Payment.

There are a couple of items in the bill that will affect 2020 tax returns, including the tax waiver for unemployment compensation up to $10,200 for many taxpayers and elimination of repayment of the Advance Premium Tax Credit. We realize you may have a lot of questions regarding the execution of the provisions and we want to assure you that Drake Software is working closely with the IRS and state taxing authorities as they update their forms, instructions and systems to accommodate the changes. 

As we learn more, we will keep you informed on related software updates. 
 
TIP: To generate a report showing returns that contain unemployment compensation, follow the instructions in this Drake Knowledge Base article 16991

Unemployment and Premium Tax Credit - ARP Act Broadcast Released 03.12.2021

The American Rescue Plan Act of 2021 makes a portion of unemployment compensation non-taxable for certain filers and eliminates repayment of excess funds received through the Advance Premium Tax Credit.

We ask for your patience while we work closely with the IRS and state taxing authorities to implement any necessary changes.

We know many of you are holding 2020 returns that have unemployment benefits or the Advance Premium Tax Credit. We expect the IRS to issue official guidance on these items in the near future.

For returns that have been filed with these items, we advise that you hold off on filing amended returns until the IRS provides official guidance.

TIP: To generate a report showing returns that contain unemployment compensation, follow the instructions in this Drake Knowledge Base article 16991. To generate a report showing those who have repaid some or all of their Advanced Premium Tax Credit, follow the instructions in this Drake Knowledge Base article 13332.

Unemployment Compensation - New Exclusion Broadcast Released 03.13.2021

Last night, the IRS released more details on how to report the new exclusion of up to $10,200 (per spouse) of Unemployment Compensation.

Our goal, as always, is to make timely changes to the software. We ask for your continued patience while we analyze, implement and test the necessary software changes. We will be working diligently to incorporate this new Unemployment Compensation Exclusion Worksheet and we'll email you again when we release the update.

In addition, we are actively working with state tax agencies to determine how states plan to address the federal tax law changes brought about by the American Rescue Plan Act of 2021. For state conformity updates, please see KB article 17148. We will update this article as we receive information from the states.

Please stay tuned for information about the Advance Premium Tax Credit (APTC) — the IRS's first priority was the Unemployment Exclusion change and we expect more information on the APTC in the near future.

The IRS has advised that you should not yet amend returns that had Unemployment Compensation or Repayment of the Advance Premium Tax Credit. Official IRS guidance is forthcoming.

Source: 
https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemployment-compensation

Unemployment - Software Update Broadcast Released 03.15.2021

Tomorrow morning, a software update for the new Unemployment Compensation Exclusion Worksheet will be available, allowing you to file returns with this new exclusion.

How It Works

You will continue to enter unemployment compensation as you have been. The software will produce a worksheet to calculate the exclusion amount, and that amount will carry to Form 1040, Schedule 1, Line 8 in accordance with IRS instructions.

Returns Previously Filed with Unemployment Compensation

The IRS strongly recommends that tax preparers and taxpayers should not yet file amended returns for the Unemployment Exclusion. Official IRS guidance is forthcoming.

State Conformity

We are actively working with state tax agencies to determine how states plan to address the federal tax law changes brought about by the American Rescue Plan Act of 2021. For state conformity updates, please see KB article 17148. We will update this article as we receive information from the states.

Advance Premium Tax Credit

Please stay tuned for information about the Advance Premium Tax Credit (APTC) — the IRS's first priority was the Unemployment Exclusion change and we expect more information on the APTC in the near future.

Source: 
https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemployment-compensation



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