Indiana Section 179 Addback from an S Corp K-1 (Individual)

[ShadyLady]

Due to Lacerte's update on Friday, March 25, 2022, their calculation of S Corp K-1 Indiana Section 179 addback is no longer correct.

When referring to the S corp calculation of the Indiana Section 179 addback, the Section 179 is limited to $25,000 at the S corp level. The correct addback is reported on the IT-20S Schedule A Line 2b which flows through to Indiana Schedule K-1 Part 4 Line 3.

In the past, we have reported this as an addback on the individual K-1 input screen in Part III by "Indiana Section 179 addback {IN]. These amounts along with any other calculated Section 179 go to Indiana Form IT-40 Schedule 1 Line 5.

These calculations are no longer correct. Lacerte is taking all of the federal Section 179 reported on Line 11, subtracting off $25,000, and adding the above referenced addback (when all you need to do is report the addback on the K-1). Lacerte is saying to remove the Part III addback, but that does not calculate the correct amount.

When you have Indiana Section 179 addback reported on a S corporation K-1, you now must calculate the actual addback amount and enter the override amount on Screen 51, Indiana Modifications - Sec. 179 expense excess add back (105) (Override).

This was very frustrating to encounter during Tax Season. We question why something that always worked was incorrectly changed. And we have been unable to get Lacerte to fix it. So be careful when preparing returns.