How did Pro Series calculate OKLAHOMA STATE INCOME TAX 511A, line 15-miscellanous other subtractions?

[slssh]

I just received a letter from OTC asking for a detailed explanation of the type of subtraction & OK statue authorizing subtraction with supporting documentation for the miscellaneous other subtraction claimed. It's not bonus depreciation but maybe NOL CO from a few years or CG not taxable in OK?? where can i find statutes for these? If the entry was 0 it would not change my refund!  I called tech support for no help.  It might be easier to just file an amened state return? Efiled Federal & State accepted. Program didn't ask for statement so no error message? Having trouble finding their #?

[PhoebeRoberts]

You really need to ask in the ProSeries forum, not ProConnect (which works like Lacerte). If you're looking for TurboTax help, please visit the TurboTax Help site for support.

Presumably you prepared the tax return, so you know what subtractions you entered? Or what subtractions generally apply to the return? 

The OTC is asking about the amount on Sch 511-A Line 15. NOL goes on Line 9, and the OK Cap Gain Deduction goes on Line 12.

You said it's not bonus depreciation, but you do know that Oklahoma decoupled from Federal for bonus depreciation starting in 2023, right? So if you took 80% Federal bonus depreciation, you'd have a Code 99 entry on Line 15 for the 20% additional OK bonus depreciation unless you overrode state bonus depreciation to match Federal.

Lacerte will sometimes hallucinate a Line 15 Code 99 entry called K-1 adjustment. This is almost always related to depletion from a pass-through entity that's limited at the Federal level but not the state. Whatever it is, I always determine whether the number is correct or override it to be correct before I sign the return.

Instructions for Line 15 say:

Enter the number “1” if the following applies: Royalty income earned by an inventor from a product developed and manufactured in this state shall be exempt from income tax for a period of seven years from January 1 of the first year in which such royalty is received, as long as the manufacturer remains in this state. To support your deduction, provide: 1) Copy of the patent. 2) Copy of the royalty agreement with the manufacturer. 3) Copy of registration form from OCAST. (74 OS Sec. 5064.7 (A)(1))

Enter the number “2” if the following applies: Manufacturer’s exclusion. (74 OS Sec. 5064.7 (A)(2))

Enter the number “3” if the following applies: Payments received as a result of a military member being killed in a combat zone: Any payment made by the United States Department of Defense as a result of the death of a member of the Armed Forces who has been killed in action in a designated combat zone shall be exempt from Oklahoma income tax during the taxable year in which the individual is declared deceased by the Armed Forces. (68 OS Sec. 2358.1A)

Enter the number “4” if the following applies: Income earned by an individual whose military spouse was killed in a combat zone: Any income earned by the spouse of a member of the Armed Forces of the United States who has been killed in action in a designated combat zone shall be exempt from Oklahoma income tax during the taxable year in which the individual is declared deceased by the Armed Forces. (68 OS Sec. 2358.1A)

Enter the number “5” if the following applies: Small Business Incubator exclusion: Exemption for income earned by the tenant. (74 OS Sec. 5078)

Enter the number “99” if the following applies: Allowable deductions not included in (1) through (5): Enter any allowable Oklahoma deductions from Federal AGI to arrive at Oklahoma AGI that were not previously claimed under this heading “Miscellaneous: Other Subtractions.” Specify type of subtraction and Oklahoma Statute authorizing the subtraction. Provide a detailed explanation and verifying documents.