5329-S Not being required for filing

Forum|Forum|4 years ago
September 25, 2021
2 replies
12 views

I have a husband and wife who both took early withdrawals from IRAs and received 1099-R. The primary taxpayer generated a 5329 for efile, but the 5329-S did not; however, the total on line 6 of part II on the 1040 includes the 10% for both. When I e-filed, only the 5329-T was transmitted, so the IRS thinks there is a problem in the transfer of numbers between the 5329 and Schedule 2. I've opened the 5329-S, but it still does not show up in the electronic filing packag

ProSeries Basic

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TaxGuyBill

Level 15

On the 1099-R worksheet, did you accidentally forget to mark the spouse's 1099-R as belonging to the "spouse"?

A

altocpaAuthor

Level 3

No, they are individually marked. He had some exceptions to the 10 penalty on his, and she did not. So his was included in the e-file, and hers was not. I know that if you only owe the 10% with no exceptions, sometimes the software does not require the 5329. But here is a couple, one who has an exception and one who does not. The 1040 says "No" for requiring the 5329, but the 5329-T was included, which is where the IRS is having an issue. I could split the exceptions between the two of them, which would make both generate, but the problem is the return has already been filed and the IRS is now saying that they owe less than they actually do because the 5329-S is not there to support the number on Schedule 2 and the 1040. The client feels that I did something wrong and they owe less than they actually do.

qbteachmt

Level 15

Were they the same type of account? Does the Spouse have funds that fall into some rule that the primary taxpayer doesn't qualify for? Did you mark one of them as covid-qualified, but not the other? Was one of them over the limit? Only you can tell us the differences, which might result in the penalty or not, and which might be one and not the other.

Don't yell at us; we're volunteers

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altocpaAuthor

Level 3

No, they are individually marked. He had some exceptions to the 10 penalty on his, and she did not. So his was included in the e-file, and hers was not. I know that if you only owe the 10% with no exceptions, sometimes the software does not require the 5329. But here is a couple, one who has an exception and one who does not. The 1040 says "No" for requiring the 5329, but the 5329-T was included, which is where the IRS is having an issue. I could split the exceptions between the two of them, which would make both generate, but the problem is the return has already been filed and the IRS is now saying that they owe less than they actually do because the 5329-S is not there to support the number on Schedule 2 and the 1040. The client feels that I did something wrong and they owe less than they actually do.

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Terry53029

Intuit Community Champion

In your original you stated " the total on line 6 of part II on the 1040 includes the 10% for both". In your second reply you said " He had some exceptions to the 10 penalty on his, and she did not." Sounds to me like you may have some errors in data entry, as I have been using ProSeries for a lot of years, and have never had a situation as you describe.

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