Federal Income Tax withheld from Unemployment compensation

Forum|Forum|5 years ago
March 31, 2021
2 replies
15 views

How does ProConnect account for Unemployment Compensation Exclusion of Federal Income tax was withheld from Unemployment Compensation? When I check the Box per instructions or just subtracts $10200 in Schedule 1 line 8 but taxes withheld are still on the 1040 on Line 25b. I would expect it to change or there should be a credit. Please help.

ProConnect Tax

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IRonMaN

Level 15

Why would the withholding change?

Slava Ukraini!

C

cafsllctaxAuthor

Level 2

Not change per se but there should be a credit to the taxpayer since that money was really not owed up to $10200. Just like Schedule 1 line 8 adjusts the Unemployment amount by $10200 I would expect a similar adjustment to taxes they paid from their compensation.

IRonMaN

Level 15

It was cash out of their pocket - it's not going to change.

Slava Ukraini!

qbteachmt

Level 15

"or there should be a credit"

Yes; the withholding will show as "already paid in" against what they owe or as part of what is overpaid. That's how withholding and estimates and refundable credits work on the tax return.

Don't yell at us; we're volunteers

C

cafsllctaxAuthor

Level 2

I am new to ProConnect. I am considering to switch from a different software. When the update was included on that software the Federal Refund amount changed after the update, I am not seeing a similar change in ProConnect. Hence my confusion. I see the Other Income amount change but not the Refund Amount. In the other software the other Income changed after exclusion as well as the refund amount.

qbteachmt

Level 15

"In the other software the other Income changed after exclusion as well as the refund amount."

Only if it affected a computation that affected the result. That can't be taken as an "Always happens" condition.

It's called Math.

Don't yell at us; we're volunteers

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