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What are new deferral worksheet rules, and old deferral worksheet rules?
The IRS updated the Schedule SE and H deferral worksheet with the April release of Form 1040 instructions. Enter 1 to apply the latest deferral rules. Enter 2 if the return was already filed using the old deferral rules.
Solution: The diagnostic will occur if the taxpayer is eligible to defer SE taxes, regardless if he/she is electing to defer or not. In a situation where the taxpayer is not deferring SE tax, we recommend entering a 2 in the field so that the diagnostic will be resolved. There will be no change to the tax return when this happens.
