Recent software update appears to be causing state returns for those eligible for reduction of unemployment comp up to $10,200 to also reduce or eliminate taxability of state taxable income even when there has been no state tax changes. In my return 2 states have been affected: Massachusetts and California.
My dependent daughter had over &;;;;;;;;;;8600 in unemployment taxes. This amount was eliminated on my federal return and also the kiddie tax was eliminated. However, the state AGI was also reduced although there was no change in the MA tax laws, and my daughter now shows a greater state refund than she is apparently entitled to. There was a similar result on a CA return.
Even though California has no taxable unemployment income, CA income was reduced by the amount of exempted unemploIyment comp, thereby giving CA residents greater refunds or less liability than they would otherwise be entitled to. My major issue is that there is no live person on the Block website (without waiting endlessly on a telephone call) that I can draw attention to this issue.
User's recommendation: I have used Block software at home for many years and this is the first time that I have encountered a problem. Generally, the quality of their software is very good.
Preferred solution: Let the company propose a solution.
Hr Block Pros: Previous years they provided excellent customer service, Nice tax prep people.
Hr Block Cons: Customer service at corporate office.