State tax refund is not being added to 1040

[sooner3]

The state tax refund is on the state tax refund worksheet but it does not make it to the 1040

[IRonMaN · Accepted solution]

The problem was corrected back in January.

There was an alert issued on 11/26.  The only problem with issuing alerts, if folks don't read them, they are pretty useless.

You can either manually check the correct box on each return, or for returns that you haven't worked on yet, you can delete the returns and transfer them again to correct the issue.

[IntuitCharlene]

Development is looking into this issue. 

If the Income Taxes box is not checked on Line C of the State and Local Income Tax Refund Worksheet and it should have been then you would want to check that. 

If you are sure the full prior year refund should be taxable this year you can skip making the manual adjustment and just check the box below line 4 for "Use this worksheet to complete taxable refund amount? - If no, skip this Smart Worksheet. Total refund from Line 1 column (b) will be reported as income." 

[JOFI]

This is an important glitch in the software this year that needs immediate correction.  I just realized that, for all of the returns I have completed this year where there was a state refund reported, the State and Local Income Tax Refund Worksheet is showing that the taxpayer deducted general sales taxes on their 2017 return instead of Income taxes (Box 2 is clicked for Line C instead of Box 1), even when this was not the case at all.  As a result, the state refunds are not being calculated as taxable income and the taxpayer's final liability is smaller than it should be.

Two questions:

1) Why has this problem not been corrected?

2) Why has Intuit not immediately notified all Proseries users of this important glitch and the need to manually override this default sales tax box click?

[garman22]

Look above @IRonMaN response. His response is dead on. If I could advise in the future, I would say visit the forum often during the tax season as many do post these issues and had you known, you could've avoided this issue. Good luck with the rest.

[JOFI]

I take your point here, but like everyone else here, I pay for this software and I don't think it is an unreasonable expectation that errors like this not occur in the first place.  It shouldn't be my job to visit this forum every day to learn about errors others have detected in the software program.  

[Marc-TaxMan]

Early birds get bit.  I saw here the messes caused by today's update, so I have held back until maybe Thursday other users report no problems.  I'm still working returns; but I will hold back on efiling them until things look safer and I can update.

[IRonMaN]

jofijohnjoseph - I don't know about you but I have made at least one or two mistakes in my life.  Software is never perfect, there are going to be midcourse corrections.  When was the last time Microsoft ever issued an operating system that never required an update.  Apple phones?  Never seen an update there?  An alert was issued on this issue way back in November.  If you didn't read the alert that flashed when you opened up the software after that date, looks like you can notch up one error for yourself along with the rest of us.

[garman22]

I seem to be fairly safe so far from these update snafu's. Thank god!! But I agree, holding off on updates these days seem to be the safest bet. I do same with my iPhone updates in case of bugs. Seems their programmers are tripping over their own feet every update, breaking this or that. Weird.

[sjd32]

I just received a IRS notice for tax due because of the refund calc error..The notice includes penalty & interest.

It is absolutely ridiculous, that your answer is a Nov alert solves the problem..This is a calc error not some benign administrative notice..A calc error in any part of the program causes clients tax liabilities to be incorrect..two years later they get a notice from IRS...

Intuit has a duty to an immediate update to the problem and sufficient notice so this can be remedied to cause the least disruption..Again, its a calc error..we do not have time to manually recalc to assure accuracy..

I am sure many Pro Series users will begin to see IRS notices in regards to this matter...

Is Intuit going to reimburse the clients in some manner..should they pay the preparers for their time in

correcting these errors...

Intuit need to do more then a Nov alert and needs to do it now............

[sjrcpa]

As preparers, we have a duty to review the tax returns before we release them.

Yes our software should be accurate, but the buck stops with us. Somewhere in the fine print of our purchase agreement and/or license Intuit also tells us this.

I have no expectation that Intuit will reimburse penalty and interest. But you can try asking.

Do lots of people actually have taxable state tax refunds these days? With the $10,000 SALT limitation I rarely see a taxable refund (nor did I in the old AMT days).

[rbynaker]

This thread has a date stamp of 12/7/2019 when everything was migrated to the new platform.  If someone is having a problem now it's going to be a different error.

[sjrcpa]

@sjd32 , posting today, said they received an IRS notice related to this error. It's right above my post unless the forum gods move it.

[IRonMaN]

"Intuit has a duty"

And that absolves your duty to actually look at the return to make sure whether or not it is correct?  You bought tax software, not a Tax God.  Software can have glitches, but that's why someone paid you good money instead of wasting bad money on Turrddotaxx.  If they are going to pay someone just to enter data into a software package, they could have just bypassed you and gone the Turbo route. 

[sjd32]

If I had to check every computation that goes into an average return it would take hours to complete...the thrust of my post was the incredible lack of appropriate response to a serious calc error...

Do you check every tx computation..who comps..elimination comps..credit comps..all comps related to diminished deductions..I could go on..

[IRonMaN]

For the first returns out the door, yeah most of those get checked.  As long as we are asking about who checks what, do you check anything?