Level 2

College Student receiving unemployment

Forum|Forum|5 years ago
February 25, 2021
4 replies
10 views

College student receiving 15000 in unemployment and when entering parent info for form 8615 their tax is over 6000. Unbelievable amount of tax for college student! Have multiple college students faced with this issue.

This topic has been closed for replies.

sjrcpa

Level 15

I find it unbelievable that so many college students got so much unemployment benefits.

What did they do with the money? Why didn't they have tax withheld on it?

I'm having trouble working up sympathy here.

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

BobKamman

Level 15

That's right. Blame the kid, don't blame the politicians who wrote the law. And where does it say he did not have tax withheld? From what I have seen, the choice is either zero or ten percent -- higher amounts are not an option.

And how much was your PPP grant?

Give them a year, and Congress may get around to fixing the Kiddie Tax rules so that unemployment is considered earned income. I would delay filing the return and tell the students to call and email their members of Congress. There are still a few journalists left who cover good tax stories, also.

rbynaker

Level 13

40% seems a little high, what tax bracket are the parents in?

Not sure what software you're using but if it's ProSeries, it might be related to an "unexpected behavior" discussed in this thread:

https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/kiddie-tax-unemployment-craziness/00/126774/message-id/66004

dkh

Level 15

Until ProSeries has a fix - to get the proper calculations on the F8615 you HAVE to click on the Quickzoom for Schedule D Tax Calculation Worksheet. No entries are required on the Sched D but it activates something mysteriously I've had two F8615's and this worked

if you read the thread that @rbynaker referenced it discusses this quirk

@sjrcpa I agree with you on no sympathy for the college students with tax on this crazy amount of unemployment. I cannot understand how they would even qualify

K

KathyC44Author

Level 2

All, I did the family link and that worked to lower the tax. But 2300 tax is still high. College students were allowed to get unemployment under the Cares Act. Taxes were not withheld in the beginning of collecting even with requests from taxpayer. Student did have 970 withheld as most of you have discovered that unemployment did not withhold a full 10% as they were grappling with getting money out the door.

Agree with the writer about the need for tax reform. How about home office deduction for all the at home workers in 2020?

BobKamman

Level 15

@KathyC44 "How about home office deduction for all the at home workers in 2020?"

The at-home workers in my family are saving more in commuting costs than they are out of pocket for any increased expenses. I know there are those who have had to buy more technology or even move to a larger space. When there are complaints about sending $1,800 tax-free to people who make $75K a year, I think about those people.

I'm glad you found a solution here to the software glitch. Since only 1% of users would show up here with a question about it, I feel sorry for the students whose returns are being prepared by the other 99%.

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