Level 5

Question

How to allocate unemployment income in a community property state

Forum|Forum|5 years ago
March 26, 2021
6 replies
21 views

Is there an easy way in Lacerte to allocate unemployment income between spouses in a community property state to get the maximum $20,400 exclusion even if one spouses UI is under $10,000 or only one spouse has UI?

Lacerte Tax

This topic has been closed for replies.

sjrcpa

Level 15

Specifically CA? Since I don't think any of the other community property states have opined on this treatment.

The more I know the more I don’t know.

A

amec

Level 5

Calhoun v. Commissioner (1992) 64 TC 222 establishes that UI is community property in CA.

I've seen a post on another board that indicated that Lacerte is working on updating for this split.

K

Kathleen1Author

Level 5

That would be awesome. I tried unsuccessfully to fake out the software.

abctax55

Level 15

In a different forum ... there's a long discussion about this; basically says there ISN'T an easy way to do so in Lacerte, for CA purposes.

I have one to *play* with one this weekend that has the same scenario. I'll try to remember to report back if/when I figure anything out. And you, please do the same?

HumanKind... Be Both

qbteachmt

Level 15

You can read the prior similar topic here:

https://proconnect.intuit.com/community/lacerte-tax-discussions/discussion/how-do-i-get-lacerte-to-evenly-split-unemployment-compensation/01/146216#M27696

Don't yell at us; we're volunteers

H

hgtc

Level 5

It looks that Lacerte has fixed this UI split for MFS yesterday.

K

Kathleen1Author

Level 5

Are you referring to splitting the income on MFS returns, or splitting the income on a MFJ return? And how could you tell that they fixed it?

K

Kathleen1Author

Level 5

Does anyone know if Lacerte has fixed this so that unemployment income can be allocated between spouses when filing a joint return to get the full $10,200 exclusion for each spouse when only one spouse has unemployment income?

A

amec

Level 5

Yes, the have fixed this, at least for CA residents. But they have to file MFS, not MFJ.

K

Kathleen1Author

Level 5

So you can't get the exclusion for both on a joint return, or they just haven't programmed it yet?

A

anglerblue

Level 3

This problem only seems to concern CA returns in which the preparer wants to adopt the position promoted by Spidell that UI can be split between spouses due to community property laws. Simply make two entries, one for taxpayer and one for spouse, reporting 50% of the total UI for each. The program will then allow the total MFJ exclusion of up to $20,400, No program update needed.

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