PTE Tax - CALIFORNIA Form 3893 (PTE) and Instructions - Is it Lacerte, or me losing it?

[joshuabarksatlcs]

For this discussion, ignore the effect of income tax liability (LLC or S corp) and estimated tax. 

The issue is illustrated below with 100S Line Numbers.  Same result for 565 and 568.

If Form 3804 shows an amount, it flows to 100S Line 29.  Let's say the amount = 10K

My logic:

1. If the payment has YET to be made, Line 35 should be zero, Line 40 Tax due should be 10K.  Voucher 3893 (PTE) should be printed. Voucher 3893(ES) also printed.

2.  If the payment has been made, line 35 should be $10K, Line 40 Tax Due should be zero.  NO voucher 3893 (PTE) for 3/15.  Voucher 3893 (ES) for 6/15 printed.

Lacerte is the opposite.  If I enter $10K on Line 35, the balance is zero (correct), but voucher 3893 (PTE)  and 3893 (ES) are BOTH printed with instructions.

If  I enter zero on Line 35, the balance is $10K.  Voucher 3893 (PTE) and instructions are NOT printed.  ONLY 3893 (ES) and instructions are printed.

I tried to explain to Lacerte and Kenneth kept telling me I was wrong.  Was I??  Am I losing it?

I believe CCH does it "My Way"...

[IntuitRebecca]

Hi there,

I think (but am not certain) that what you're describing may be the result of how we implemented the PTE payments this year in order to be able to include the PTE remaining balance due in the total tax due line when you have the return set up for direct debit. 

I'm curious if you have your test return set on screen 3.1 for CA electronic payment? Since that setting impacts how the PTE tax flows this year. 

Assuming the return isn't paid electronically - when you're referencing entering amounts on line 35, which input are you using exactly? If it's screen 48.011, "Payment voucher 2021 Form 3893[O]", entering -1 there will suppress the voucher in all cases. 

This article might explain what I mean better, in the section for "To make or record PTE payments": https://proconnect.intuit.com/community/state-taxes/help/california-pte-tax-in-a-100s/00/195467

[joshuabarksatlcs]

How Lacerte implemented the payment and instructions was NOT "user friendly" to taxpayers who pay the FTE Tax with check.  Also it is NOT (my understanding) how CCH implemented it.  It defies logic that for a client who has yet to pay the tax, I would NOT get Lacerte to automatically print the voucher and instructions; for a client who has NO 3893(PTE) payment, the voucher and instructions would be printed. 

Getting to your point.  100S Line 35 input is on Screen 48 under PTE Elective Tax Payment Vouchers(s), the fourth Item - that is “Payment voucher 2021 Form 3893[O]".  This is regardless of the payment method - EFT or check.

If EFT is set up on scree 3.1, Lacerte generates Form 8453-C, showing the overall balance and NO mention of Form 3893.  The balance is thus the Form 100S balance, a combined result of the regular tax, less estimated tax payment plus Form 3893(PTE).  Thus if the estimated tax is OVER the income tax, the overpayment would net against the PTE Tax.  This is okay.  I can make do with Skipping the details about how the balance is actually the result of the PTE Tax.  No itemization needed to give to the client.  It's just that when the client opts to pay with check that the return, instructions and 3893(PTE) are NOT consistent.     

[IRonMaN]

[IntuitRebecca]

Thanks for the explanation, I'll be sure to pass this feedback along to the team. Correct me if I'm wrong on any of the below - I want to make sure I understand the issue entirely.

Setting aside any EFT/WebPay scenarios - I think the disconnect here is that Lacerte generates the full amount of PTE on line 35, unless it's overridden. The 3893 (PMT) should generate with the full amount from line 35 (or, line 35 less any amount entered as "Pre-payment already made") .

It sounds like you're expecting line 35 to be $0 when the client hasn't paid any PTE yet; so you use the PTE Elective Tax Payment Vouchers(s) override to set that line to zero, but then you're stuck with no voucher or instructions. Is that correct?

[joshuabarksatlcs]

@IntuitRebecca   You pretty much nailed it.

Setting aside any EFT/WebPay scenarios - I think the disconnect here is that Lacerte generates the full amount of PTE on line 35, unless it's overridden.

I've explained to "Kenneth" in multiple emails that the amount on Form 3804 Line 1 amount should flow to Line 29, not Line 35, of 100S, but he and I were on very different wavelengths.

RE: The 3893 (PMT) should generate with the full amount from line 35 (or, line 35 less any amount entered as "Pre-payment already made") .

Yes. 

RE: It sounds like you're expecting line 35 to be $0 when the client hasn't paid any PTE yet; so you use the PTE Elective Tax Payment Vouchers(s) override to set that line to zero, but then you're stuck with no voucher or instructions. Is that correct?

Yes.  My comment was based on the same logic of how tax, estimated tax and tax balance work.  On Form 100S without electing the PTE Elective Tax , a balance on line 40 should generate Form 3586 (e-file) .  In the 2020 program, that was how it worked. 

A bonus while we're at it.  I just checked the 2021 program, (again, in this case, zero on Line 29 and Line 35, i.e. PTE Tax NOT involved).  Form 3586 (e-file) is NOT generated for an e-file 100S that has a balance due.  Probably a domino effect of the above.

Sigh.... 

[joshuabarksatlcs]

@IRonMaN   Good one.  Instant Karma.  You got me, and you're kind - only one

You should have come back with three.   One for you, one for Paddy and one for Sven, Ole and Lena...

[joshuabarksatlcs]

Clarification:  Form 3586 (e-file) is NOT generated for an e-file 100S that has a balance due.  

In my case: Line 30: $800; Lines 31, 36, 38: $59;  Line 40: $741.  NO 3586 (efile)...  (+)

@IRonMaN you need to send me a sad face for me to put at (+) above. 

[IRonMaN]

I always try to come through for requests.  But as long as I'm here:

Three Englishmen were in a bar and spotted an Irishman. So, one of the Englishmen walked over to the Irishman, tapped him on the shoulder, and said, “Hey, I hear your St. Patrick was a drunken loser.”

“Oh really, hmm, didn’t know that.”

Puzzled, the Englishman walked back to his buddies. “I told him St. Patrick was a loser, and he didn’t care.” The second Englishman remarked, “You just don’t know how to set him off…watch and learn.” So, the second Englishman walked over to the Irishman, tapped him on the shoulder and said, “Hey, I hear your St. Patrick was lying, cheating, idiotic, low-life scum!”

“Oh really, hmm, didn’t know that.”

Shocked beyond belief, the Englishman went back to his buddies. “You’re right. He’s unshakable!”

The third Englishman remarked, “Boys, I’ll really tick him off… just watch.” So the third Englishman walked over to the Irishman, tapped him on the shoulder and said, “I hear St. Patrick was an Englishman!”

“Yeah, that’s what your buddies were trying to tell me.”

[joshuabarksatlcs]

Thank you.  And, thank you!

If only I could figure out how to add a signature line for my posts, it'd say:

"I come here for kudos and IRonMaN's jokes." 

[IRonMaN]

If you are looking for your signature line, click on your icon on the upper right of the screen.  Select "my settings" and then click on the intro tab.  Then use the signature line to your heart's content.  As a side note, I couldn't get there using Edge so I switched a few months ago to FireFox.  The browser did make the difference.

[joshuabarksatlcs]

Here we go...  (When I signed up here, that was not there.   Perhaps now that I've changed to chrome - more like Chrome has somehow has change me to Chrome.)

[joshuabarksatlcs]

Except that I couldn't make it bold....   

Also, the post was sent while I was editing.  Now the grammar police is after me...  Got to go...

[IRonMaN]

Thanks to George's short HTML class I attended you need to add some characters before and after the signature such as:

<br /><b> Ukraine - hang in there </b>