Lacerte incorrectly gives the following critical diagnostic warning for a grantor trust Wisconsin Form 2: "The State of Wisconsin does not require Form 2 to be filed in the entire trust is a grantor trust that is disregarded for income tax purposes. Process the return as federal only and remove Wisconsin from E-file and State Return field in Client Information (Screen 1) (ref #45769)." In prior years, we could work around this diagnostic by diabling the e-file diagnostic error checking. However, this does not work for the 2023 tax season. Lacerte's critical diagnostic warning in incorrect for the grantor trusts which I prepare. Per the Wisconsin Form 2 instructions: "GRANTOR TYPE TRUSTS: If the entire trust is a grantor trust that is disregarded for income tax purposes, the trust is not required to file a Wisconsin fiduciary income tax return.
Exception: Grantor trusts filing under a federal employer identification number instead of a grantor’s social security number, including qualified subchapter S trusts (QSSTs), must file a Form 2. Include a complete copy of the entity’s federal return." The grantor trust tax return which I prepare have file under a federal employer identification number. Therefore I must file a Wisconsin Form 2 for these grantor trusts. Lacerte needs to fix this so that we can e-file Wisconsin Form 2s for grantor trusts which file under a federal employer identification number.
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