57344

[#1]

The following critical diagnostic is generating: "efile: The Colorado sales tax refund on Form DR 0104, line 32 cannot be claimed after April 18, 2022 for the tax returns with no state income tax liability (Form DR 0104, line 15) or no income tax withheld (Form DR 0104, line 18). To suppress the state sales tax refund calculation, select the box "Taxpayer not eligible to claim state sales tax refund" in the Miscellaneous Information/Direct Deposit screen, under the Colorado Miscellaneous section. (ref. #57344)" Solution: The Colorado instructions state that in order to qualify for the Sales Tax Refund, the return must be postmarked by April 18, 2022, or October 15, 2022. However, the question comes up if an extension has been filed for a return that has either of the two conditions (no tax liability and no withholding paid), can it be filed by October 15th. The State of Colorado has confirmed that the Sales Tax Refund can only be claimed if the return is filed by April 18, 2022. It cannot be claimed on returns filed after this date.

[Peaches]

I have reported to Lacerte that this diagnostic is incorrect.  See tax.colorado.gov/TABOR

The actual rule says "AND" but the diagnostic says "OR".

Under "How the 2021 TABOR Surplus Will Be Refunded", 2nd bullet point, "Eligible full-year residents who do not have a Colorado income tax liability AND are not claiming a refund of wage withholding, must file a return by April 18, 2022." (emphasis added).  (This must refer to people that are otherwise not required to file.)

I spoke with a Lacerte rep this morning and he said that as of 7/5, CODR had instructed all software providers to use the "OR".  However the state's website shows "AND".  So, Lacerte is not changing the diagnostic.

I will be overriding the diagnostic to e-file for my client with a state tax liability, but no withholding.  I called CODR and the rep agreed with me that the diagnostic is incorrect and that the tax returns should go through claiming the sales tax refund if there is an amount for either withholding or tax liability on the Colorado return.