OR Local Tax extension payments paid in 2023 are being included on 2022 Fed Sch A and OR Sch OR-A

[Karen_pdx]

On the Portland area local returns MC-40 and MET-40, Lacerte 2022 Individual module does not have a separate input line for inputting the extension paid in April 2023 and advises using the "Prepayments" line, which would also contain the amounts of any 2022 estimated tax payments.

When extension payments for the Oregon local tax returns MC-40/MET40 made in April 2023 are input as directed on Screen 54.028 in the "Prepayments" box, the Lacerte individual module includes the extension payments made in 2023 on the Federal Sch A and Oregon Sch OR-A on the tax returns for 2022. Seems like a programming error, since the "Prepayments" are not being differentiated as between payments made in 2022 and those made in 2023.

When I asked Lacerte email support for how to keep the 2023 local extension payments out of the 2022 Federal Sch A and OR Sch OR-A, they said they reviewed the programming and believe it is correct even though a cash basis taxpayer can only deduct taxes paid in the year they are paid. This issue actually does affect calculation of the Oregon taxable income for the client I inquired about since the other property taxes and local income taxes paid in 2022 did not exceed the $10,000 cap for Oregon tax purposes. So the 2023 extension payments are being deducted on the 2022 Oregon Form 40.

I am thinking I can't use Lacerte to e-file the MC-40 and MET-40 and will have to process two files - one to get the 1040 & OR-40 for efiling and the other to get the two local returns, which I will likely file on the Portland Revenue Online (PRO) system to avoid Lacerte's e-filing an incorrect OR-40 with the local returns.

If anyone has any other ideas on how to work the program, I would be interested in hearing them. 

Hard to believe Lacerte actually believes their programming is correct when 2023 tax payments are being deducted on 2022, but that's the answer they gave me.