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Oregon federal tax subtraction is incorrect

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cinmon428
Level 7

Maybe Lacerte is corrected, but not Proseries yet. 

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Geni
Level 2

I don't know what options Pro Series has, but in Lacerte, under Tools menu, there is a communication → service request-email selection.  I would try that and see if you can get them to respond.  

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BobKamman
Level 15

@Geni 

Does the Lacerte calculation show the same amount of state tax owed, whether or not the EIP#2 was received?

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sjrcpa
Level 15

Do they expect OR to personally reach out to them?


Ex-AllStar
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BobKamman
Level 15

@sjrcpa "Do they expect OR to personally reach out to them?"

In the Oregon Dept of Revenue email quoted in a message here, they said that they had reached out to the software developers.  That's why I asked the state for a copy of what they had sent.  Still waiting.  

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Geni
Level 2

Yes.  I used the return we have been testing.  I put -1 in the EIP 2 section, it showed a $1200 recovery rebate credit, showed the correct amount on Oregon and the tax owed and refund were the same.

 

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sjrcpa
Level 15

@BobKamman Thanks. The thread was getting long. I missed that part.


Ex-AllStar
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Jerri
Level 1

Is there any information on WHEN the ProSeries software will be corrected to include the 2nd stimulus in the calculation for Oregon Tax?  Why don't they just do the same thing they did for the Lacerte software and make it a calculation on the Federal Tax Subtraction in the Oregon return?

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cinmon428
Level 7

I must have spent 10 hours complaining until I was blue in the face and still no change. But you can uncheck the box to "check for errors" when you efile and the return will go through to Intuit even though there is an error message that you overrode the amount they show. 

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BobKamman
Level 15

I am still waiting for a response to my Open Records Request last week, for (1) anything they told software developers; and (2) anything they told the general public.  I'm thinking of making another request for anything they told the Governor, but I'm not yet that impatient.  

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BobKamman
Level 15

I received a response to my Open Records Request late this afternoon. There were two emails to local media, about how the EIPs generally reduce the deduction and therefore increase the state tax, but not addressing the specific question of whether it makes a difference if the second EIP was not received. There were also several emails from taxpayers, asking or complaining about what they see as a state tax on the EIP.

Then this. A “Tax Aide” preparer in Ashland reported this to Oregon DoR on January 19:

“We have 4 returns that are required as part of the Tax Aide certification process, and that's how we found the issue initially. Today we accessed the TaxSlayer software to look at these and it appears that the issue is partially fixed. Now the software is reducing federal tax liability appropriately for the second payment if it was received as a Recovery Rebate Credit (RRC) but not if it was received in advance as an Economic Impact Payment (EIP). For all returns where the second amount is an RRC, the OR subtraction is taking both into account. We have one return where both amounts were received in advance and the software is just reducing the fed tax liability by the first one. We have another return where we altered the facts so that he didn't get the first EIP but did get the second EIP. The software gave him the first amount as an RRC and reduced his fed tax liability on OR but did not further reduce it by the second EIP.”

The response from a DoR “systems analyst” (I would consider that a title for a computer person, not a tax person) was:

“TaySlayer should include both Economic Impact Payments and the Recovery Rebate Credit in the calculation of the Oregon federal tax subtraction. Even if the Economic Impact Payment was received in January 2021, it is still included in the 2020 federal tax subtraction as the payments are really a prepayment of the federal Recovery Rebate Credit.”

I had asked for any communications between DoR and other software vendors, or at least to or from Intuit. None were provided. My conclusion is that only TaxSlayer was contacted, indirectly through the TaxAide preparer.

Those who want to follow the DoR position, which perhaps coincidentally results in the higher amount of state tax collection in all cases, may choose to do so.

In the process, I also found that the DoR admitted there was a mistake in the original instructions for the OR-40. On the Page 13 worksheet for computing the federal tax subtraction, Line 3 originally stated, “Line 2 minus Line 1.” This was later corrected to “Line 1 minus Line 2.” Doesn’t matter for purposes of this discussion. No correction or additional explanation has been issued for that worksheet regarding how to report EIP#2.

Geni
Level 2

I cannot believe that Intuit would not have gone ahead and checked all their products to see if they were handling the EIP & RRC correctly since they knew it to be a problem in Lacerte.

As far as ODR contacting software developers, one 'supervisor' @ Lacerte said they had not gotten anything.  I found that hard to believe, but maybe it's true.

 

cinmon428
Level 7

What really frustrates me is that it's so **bleep** hard to reach a person who is supposed to fix it. I got lip service for a few weeks and finally gave up. I may be looking for another software provider next year. This is nonsense. 

cinmon428
Level 7

And beyond that, there is no communication about this issue from them. It's like knocking your head against the wall. 

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Jerri
Level 1

The Oregon calculation for the Federal Tax Subtraction is still not corrected.  I talked with Nicole Carol at Intuit yesterday and she assured me that something was going to be done.   She was very knowledgeable and helpful. 

She said I would receive an e-mail either yesterday afternoon or today regarding either that the software would be corrected or a work-around would be posted.  

The only e-mail I have yet received is the one that directed me to the Commmunity.

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cinmon428
Level 7

The workaround I was told to use was to override the incorrect number for the FTS and uncheck the error-checking box when you go to send the returns to Intuit. That has worked well so far. I don't know what will happen on Friday, but all of my returns that the software has done incorrectly and that I have overridden have gone through. 

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martyr901
Level 2

I, too, have verified that today's (2/10/2021) version of TurboTax Deluxe containing Oregon Form 40 performs an incorrect calculation of the Line 10 Federal tax liability by utilizing only the FIRST of the two received stimulus payments in the calculation.  

I reached out to the Oregon Department of Revenue on 2/9, and the person I spoke with agreed that BOTH stimulus checks are to be counted on 2020 tax returns.

I am heartened to hear that a knowledgeable Intuit person named Nicole Carol is saying "something was going to be done".  Can anyone provide the when exactly this will happen?  Is there any way I can get in touch with her to verify? 

If this isn't fixed by a prompt software update, I may be forced into mailing a paper copy of the Oregon return.

Jerri
Level 1

Hi ALL - this is Jerri, the one that talked to the great Nicole Carol!

I just did an update and the Oregon calculation on the Federal Tax subtraction is corrected to include both the EIP1 and EIP2 Stimulus payments.

Yahoo!

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cinmon428
Level 7

CONFIRMED--The Proseries Basic program is now correctly calculating the Oregon FTS for EIPs and for Rebates. About time!

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martyr901
Level 2

Thanks for the reply, Jerri.

The Oregon Federal Tax Liability calculation solution you have just announced must be part of a software update to the ProSeries?  I just opened 2020 TTax Deluxe, and nothing has yet been updated (2/10) to fix the error.

Hopefully, the software update you have mentioned will trickle down to us individual filers?

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Jerri
Level 1

That would be logical and correct, but I don't know that I would count on it.

Is there a number to call for Turbo Tax support so that you can push it?

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BobKamman
Level 15

I just did an update and ProSeries Professional still shows more Oregon tax owed if the $600 EIP#2 is not shown on Line 19 of the Recovery Rebate Worksheet.  

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cinmon428
Level 7

Bob,

The Rebate part of the calculation was always correct. In other words, say a person did NOT receive the second stimulus payment and wants a credit on his taxes. So you enter "0" on line 19. THAT CALCULATION WAS ALWAYS CORRECT. What WAS NOT correct was the Oregon Subtraction in the event that a person DID receive both stimulus payments in advance. The second stimulus, whether it was 1200, 600, or whatever, was not being subtracted from the FTS on the Oregon return. 

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Jerri
Level 1

Correct!  The second stimulus payment was not being deducted from the federal tax with the 1st one.  That is what I went over in great detail with Nicole Carol at ProSeries yesterday and the last update I received corrected the problem.

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martyr901
Level 2

Oh, yes.  The last two days I have been on the phone for hours with TTax Support folk.  Unfortunately, one gets stuck with low level problem solvers, who mostly stick to a script.  Efforts to proceed to a higher level of problem solving get stymied.  That's why I inquired about the contact info for your problem solver Nicole Carol?  Is there a way I can alert her to the problem as it still exists for individual TTax filers?

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Jerri
Level 1

Okay, I get it.  I called the ProSeries Tech Support # and when asked said that it was a program calculation error...the program wasn't working right.   I let them call me back and Nicole was the terrific person who called back.  That was the first time I got real help.  The other times I called in I got the same party line and and an e-mail that had the link to the Accountants Community that we are conversing on now.  

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martyr901
Level 2

Thanks, Jerri.

Sigh, yes, I have been saying over and over that I believe it to be a software error in the program.  They never give me anyone to deal with that or offer to call me back, so I get no real help.  I take it you don't have Nicole's number to provide me a way to find some real help?

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BobKamman
Level 15

@Jerri  

Still not working that way on mine, and I just updated.  Maybe try again tomorrow.  Maybe Basic has a higher priority than Professional.  

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cinmon428
Level 7

I just tried Professional with the Oregon FTS and it works perfectly on my computer, whether I enter pre-payments of the stimulus or credits on the tax return. Works like a charm.

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Jerri
Level 1

No, I don't.  However, Nicole did say that she usually gets the Software glitch questions.  Maybe I was just lucky when I called in.  I simply gave my problem as "software not working properly".

 

 

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Jerri
Level 1

I just received a "noresponse: e-mail from the fabulous Nicole Carroll.  She told me that they were working on it and it would be out today or tomorrow or at least by Friday in the updates.  As I said, it is working for me.  It subtracts both stimulus payments from the federal tax and that number transfers to the Oregon Federal Subtraction.  Of course. there is no change in the minimum federal subtraction if the tax is say $10,000 and the Stimulus payments are 1,200 and 600 because 10,000 - 1,800 is $8,200 which is more than the maximum federal tax subtraction.

Hope an update that fixes it comes thru for you!

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martyr901
Level 2

Thanks, Jerri.  I have finally received a call back from a higher level tech person who has asked me to submit my tax file and will begin looking into the error from the TTax Deluxe software perspective.  I am not a tax prepare professional, so this forum has done wonders to confirm that I am not crazy!

I fully understand how the stimulus payments are supposed to be applied to determine the figure in Line 10 of Oregon Form 40 and how the final effect depends on how much federal tax liability each person has.  I happen to be in the area where the stimulus payments subtraction take me below the Oregon maximum federal tax subtraction.  That's what alerted me to this subject in the first place!

Just for clarity for us TTax Deluxe individual filers:  When in the Federal section, there is a page for entering the amounts for both stimulus checks. All looks well and good there.  However, when proceeding to the Oregon form 40 section, the software only uses the FIRST stimulus check amount in the calculation in the worksheet entitled “Oregon Federal Tax Liability Subtraction Worksheet”.

You can verify that by going to the Forms link (upper right corner). Once the Forms window pops up on the left, scroll down to Oregon Individual and look for “Fed Tax Lib Wk”.
Click on that to open the worksheet. You should notice that only the FIRST stimulus payment is subtracted in the calculations, not both as should be.

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Jerri
Level 1

Glad you are getting the attention you should.  If everyone in Oregon who uses TTax were to use it without the correction that should be coming now that you have reached someone, it would be a mess.

I'm glad you stuck with it.

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cinmon428
Level 7

For many people who have already sent their TTax returns to Intuit, yes, there will likely be a problem. They will likely receive a correction notice from the Dept of Revenue who knows, many months from now, with a request for payment because stimulus #2 wasn't used, and possibly with penalties and interest. So this is why I started complaining about this quite some time ago. And I would strongly recommend better communication with the Intuit software people in the future. There needs to be a board showing the known issues and expected dates of correction. This is really unprofessional the way this has been handled. 

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Geni
Level 2

Jerri:

I have found that sticking to the issue until resolution is a great way to solve these issues.  You just have to find the right tech person who is willing to walk through the whole process with you to see the problem.  Hope it works.

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martyr901
Level 2

Thanks for everyone's input...really helped me get through this...I hate loose ends when it comes to tax prep!

Now I have good news to report!

This afternoon I finally got some traction with an actual problem solver at Intuit and this individual seemed willing/able to deal with the fact that there might be a programming error in the TTax Deluxe tax preparation software. Just this very moment (2/10, 830PM PST) I opened TTax again and during program startup there was a software update pertaining to the Oregon portion.
I let the update complete and once my return loaded, noted the Oregon Refund amount had been reduced (as it correctly should have been), then checked the Oregon Federal Tax Liability Subtraction Worksheet in Forms…voila!
The second stimulus payment has been included in the calculation and all looks correct per my (our) research!

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I have no income 

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Thank you so much 

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cinmon428
Level 7

The federal tax subtraction for Oregon doesn't work properly (again) this year. Stimulus 3 is not being subtracted. Made 4 calls to tech support. They are really useless. 

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IntuitGabi
Community Manager
Community Manager

Good morning! We're reviewing this in the program and a fix will be available later on this week in the next release. 

turb otax sucks
Level 1

yea a bug. SAME as last year still there in 2022.

Good job?

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cinmon428
Level 7

I think they just fixed it on Proseries.

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turb otax sucks
Level 1

they charged me. they had better fix it

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