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I just worked on a tax return that has MIP (mortgage insurance premiums) which is deductible on the Federal tax return. When I went to the Alabama return, Proseries carried that MIP over to Schedule A, Other Miscellaneous Deductions not subject to 2%. I have to override it to remove it and put 0 in the deduction. Alabama does not allow MIP as a deductible - clearly states that in the instructions, verified when I called the State Dept of Revenue. This is definitely a programming error on Intuit's end.
Heads up to everyone who has a client with MIP and files an Alabama Form 40 return!
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I just reached the correct level person at the Alabama Dept of Revenue who was knowledgeable and who stated that the booklet is wrong and that you CAN TAKE MIP as a deduction under Miscellaneous Itemized deductions NOT subject to 2%. Alabama is tied to the Federal so as long as it is deductible on the Federal return it is deductible on Alabama.
Therefore Intuit ProSeries IS HANDLING IT CORRECTLY ON ALABAMA FORM 40, SCHEDULE A
Sorry for the alarm!
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about gave me a heart attack with that one. :>)
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Never trust Alabama, always verify with different people at least twice! Lesson learned!!
