TurboTax miscalculated state income taxes for some customers in Georgia who reported unemployment income on their 2009 tax returns and filed prior to February 12, 2010.
As a result, those customers must amend their Georgia state returns and could owe additional state income taxes.
Unemployment income is generally treated as taxable income. But for 2009, the federal government is excluding , or not taxing, the first $2,400 of an individual's unemployment benefits as part of its economic stimulus.
However, some states including Georgia, do tax that initial $2,400 of unemployment.
Prior to February 12, 2010, TurboTax incorrectly calculated that amount as not subject to Georgia state taxes.
Preparing to amend
A product update was released on February 12, 2010 resolved this issue.
Because the update automatically corrects the state return, customers who amend now must first change the income information on the state return back to how it was when originally filed.
Follow these steps before you amend your return
- Open or log in to the tax return you wish to amend and select the State Taxes tab then Continue to the Your State Returns screen. Select the Edit button to the right of 2009 Georgia.
- Continue until you reach the screen Revisit Your Georgia Info.
- Locate the Adjustments section and select Revisit on the right.
- Under the screen called Georgia Adjustments to Federal Income?, select Other Adjustments that Increase State Income, as shown below.
- Click the Continue button.
Next steps to get your return ready to amend:
- Navigate through the interview to Other Income. Note the amount of Unemployment Comp Adj ($2,400 or less).
- On a blank field, please enter a negative amount equal to the amount in the first field ($2,400 or less), as shown below, and select Continue.
Begin amending your return
- Once again, select the State Taxes tab.
- Continue through the interview until you come to the screen Revisit Your Georgia Info.
- Scroll down to Other Forms and Information and select Revisit.
- Navigate through the interview until you come to the screen Change a Previous Georgia Return.
- Select Yes, as shown below, when asked Do you want to amend a previously filed Georgia return?
Make amendment changes
- On the next screen Filing an Amended Return, select Yes, when asked Would you like to continue?
- Enter 2009 for the tax year and Continue.
- You'll see About Your Georgia Amended Return. Don't make any changes here.Select Continue.
- Under Revisit Your Georgia Info, go to Adjustments and select Revisit.
- Check Other Adjustments that Increase State Income, then Continue.
- This time, remove the -2,400 (or less), then Continue.
- Under Georgia Adjustments Summary, you should see the ($2,400 or less) unemployment income you've added. Select Continue.
- On the Revisit Your Georgia Info screen, select Done with State.
IMPORTANT: You could receive a prompt on a screen called Check This Entry, shown below.
Georgia asks you to calculate the amount of interest you owe on the additional tax you owe and enter it on Line 15.The interest is equal to 1% per month after the April 15 filing date, or $1.44 or less per month in this instance.
If you are unsure what amount to enter, you can skip this step, and let the state of Georgia calculate the interest for you after you submit your amended return. You will still be able to complete your amended return, print and mail it. Should you receive a bill for interest or penalties from the state, those would be covered under the TurboTax Accuracy Guarantee.
Under the screen called Check This Entry, select Amended Fed N, indicating that you are not amending your federal return, just your Georgia return, then Continue.
- On the next screen select Done With State.
- Then go to the Print & File tab, shown below, and select Print/Save for Your Records.
You do not need to print your federal return.
On the next screen, shown below, you uncheck the box next to From 1040. And make certain that Georgia Individual remains checked.
Amended returns must be mailed and cannot be e-filed.
When you print your amended return, your mailing instructions, including where to mail your return, will print also.
Be sure to include a copy of your 1099-G unemployment form.
Remember to claim as a deduction on your federal income taxes any additional tax payments made to Georgia for 2009 when you complete next year’s return.