I have withholding on a 1099R but overall net operation loss on return. Can't find any additional reference on what is income for this diagnostic to be telling me I should paper file. I'm thinking of overriding the diagnostic and e-filing anyway but wondering if anyone has seen this.
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his diagnostic was added to prevent e-file reject F1040-071-03 that occurs when total withholding on Form 1040 is less than the total of specific categories of income. You will need to paper file the return.
Ii don't think that's my question. If I enter a negative $300,000 on Sch C and have a negative AGI the diagnostic goes away. It recognize that I have a 1099R with $125,000 gross and $25,000 withholding and have a negative AGI and thinks everything is find. Which it always has been in prior year.
My negative $300,000 is coming from a net operating loss from a Form 1041. Then I get this message. The diagnostic says income categories. Somehow the program is differentiating between a net loss from Sch C and from Sch K-1 for the same type of loss.
There should be a way around this.
There is not a way. The NOL is the root cause. I have seen this a few times with different customers.
If you believe you are getting this e-file diagnostic in error you may disable the e-file diagnostic checking; however, if the return is rejected you will need to paper file.
Note: disabling e-file error checking is not recommended when this diagnostic is triggered.
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