Iowa Form 1040 Line 27

[jfarians]

It appears that ProSeries is incorrectly calculating Line 27 of the Iowa Form 1040. The detailed instructions say to not include any stimulus money in the refund amount (https://tax.iowa.gov/expanded-instructions/federal-income-tax-refund-overpayment-received-2021). ProSeries is using the current year stimulus money in the calculation as opposed to the prior year.

For example, If I got a $5,000 refund on my 2020 tax return, but $1,800 of that was because I didn't get the first two stimulus checks, my taxable federal refund on Line 27 should be $3,200. Let's say I didn't get the third stimulus check either. If everything else stayed the same, ProSeries would incorrectly calculate my taxable refund as $3,600 ($5,000 - $1,400 (3rd stimulus check)). 

I know it is early in the season, but can you please have the software engineers look into this?

Thank you! 

[IRonMaN]

"I know it is early in the season, but can you please have the software engineers look into this?"

The train tracks don't run through this place so no engineers are going to see that question here.  If you really feel that it is wrong, you should call support and let them know there is an error.

[taxiowa]

I pointed it out to one of the administrators already.  Hopefully they are working on it as we speak.  In the meantime you can override to 0 in most cases.  Although I already had one that I had to manually enter last years recovery rebate on that stimulus line.  Because that amount should be subtracted form 2020 refund.

[jfarians]

I have been overriding with a 0 for now, but I'm glad they are aware of it.

Have a good season! 

[IntuitGabi · Accepted solution]

🚂Thank you @taxiowa 

[taxiowa]

@IRonMaN By the looks of Gabi's post there is a train track and locomotive running thru this thread.  And special thanks to Gabi for following up.  You are the best!

[IRonMaN]

I would be careful, that light at the end of the tunnel could be that train heading straight for you

[The_AntiTax_Man]

@jfarians Thanks for the heads up on the problem in PS21 IA.

[Shirley79]

Line 27 - 2021 Iowa Return

Not clear on the instructions     says "do not include stimulus payments"   when entering 2021 refund

The software is subtracting the $1400 stimulus and the stimulus was not a part of the 2021 refund.  Is that right?

[jfarians]

No. The amounts that should be getting subtracted are the 1st and 2nd stimulus checks, if they were claimed as the Recovery Rebate Credit. For example:

2020 federal refund: $5,000

Recovery Rebate Credit on 2020 tax return included in the federal refund: $1,800

The taxable federal refund on the 2021 Iowa return should be: $3,200

If you received the 3rd stimulus check, and you enter that on the federal Recovery Rebate form in ProSeries, the software will carry the $1,400 to the Iowa return, and incorrectly calculate the taxable federal refund as $3,600 ($5,000 - $1,400). 

[Shirley79]

Looks like ProSeries has some corrections to make so that we don't have to manually adjust the Iowa returns in Basic.

Thank you.

[Shirley79]

Looks like they corrected taking off the stimulus from 2020 returns when calculating line 27 on Iowa, but now - if taxpayer actually did have a Rebate Recovery Credit on their 2020 federal return - there is not a line to deduct it.

Suggestions????

[jfarians]

I have just been overriding the federal refund line to deduct the Recovery Rebate Credit, if they received one in 2020. 

[Shirley79]

Thank you - that's simple enough.