MD Form 511 PTE Electing

[dsocpa]

2 nonresident shareholders of a MD S corp electing PTE status.  On the S Corp return tax paid was $750 total ($375 ea).  On the MD 511Pass-through Enity Taxable income Smart worksheet I've got the federal income (less the $750 tax paid) which flows coming from federal schedule k-1 line 1 $6519).

Line C (smart worksheet still) the $750 comes over from the 1120S line 12 A.  Then line D $750 tax paid.  The $750 amount is then added to the federal return income (Line A PTE Smart Wkst) for a total MD income of $7269.  Which makes sense the federal income is less the amount of the state tax actually paid.  Line 2 ends up on line 4 as PTE taxable income allocable to MD.  Line 6 shows correctly $7269 total individual taxable income for members.  Line 10 computes the PTE tax due which is $582 computed on the MD total income of $7,269.   Line 13a brings in the $750 actually paid which carries down to line 13e. So far so good.  Since $582 is less than $i750 there is an overpayment of $168, which is brought down to line 18 to apply to this years estimated tax (fiscal year taxpayers).

Schedule B Part 1 correctly lists each shareholder, their 50-50% of the $7,269 and their share of tax paid on the $582 balance due.

I run an error check (regular yellow triangle).  0 errors.

I run the Review and bam error that states there is a difference of $7,269 between total distributive or prorata share of income on form 511, page 1 line 2 and the total of all distributve or pro rata share of income on form 511, Schedule B, Parts I,II,III and IV.  I have checked and cross checked for the error and determined there isn't one.  Sch B Part I (the only part showing up on Schedule B) the members prorata share of income and the prorata share of tax paid are exactly correct.  For the life of me I can't seem to figure it out.  I've and reread the insturctions, course material I've taken over the last  few months and can't find a single thing out of line.  Is this a bug in the efile error checking process or am I including (or excluding) an amount somewhere on MD return.  Really fruastrating I've spent hous trying to get this one thing wrapped up so I can move on to the zillion other returns I need to be working on.

[dsocpa]

PS, next error exactly like the previous error states the pro rata tax on form 511 lines 13e and 14 is off by $750 and the total of all pro rata share of tax paid on form 511 Sch B, part I.  So, does the MD form 511 and 511 Sch B want the actual federal k-1 income split by shareholders and the pro rata tax the amount paid?  In other words, the amounts that are coming over from the 511 to the Schedule B are the recomputed MD income amounts (with tax paid added to MD income) and the distributive share of tax paid is the $582.  But should the form state the actual MD tax paid amount of $750 instead of the MD calculated amount on Sch. B of $582?

So confused.......  What a holy mess.

[IntuitMark304]

dsocpa,

Let me try to replicate your scenario to help me understand what you are seeing. 

[dsocpa]

Please do Mark.  I probably included too much information.  Basically, the program is saying I have a difference on form 511 and Schedule B of the entire amount of MD pass through income.  The total federal is 6519.  Tax payments $750.  MD taxable = $7269.

Let's start with that difference first.  I'll see if I can cut and past the actual wording and put in the body of the reply.

[dsocpa]

Below I did a cut and paste of the error.

"There is a difference of 7,269.00 between total distributive
or pro rata share of income reported on Form 511, page 1,
line 2, and the total of all distributive or pro rata share
of income on Form 511, Schedule B, Parts I, II, III, and IV.
If you wish to allocate this difference, go to the Schedule
B, Part I, II, III, or IV and override the amount of income
allocated to the shareholder you wish to allocate."

[dsocpa]

Below is a cut and paste of the 2nd error.

"There is a difference of 750.00 between nonresident tax
reported on Form 511, page 1, lines 13e and 14, and the total
of all pro rata share of tax paid on Form 511, Schedule B,
Parts I, II, III, and IV. If you wish to allocate this
difference, go to the Schedule B, Part I, II, III, or IV and
override the amount of tax paid allocated to the shareholder
you wish to allocate."

[IntuitMark304]

That diagnostic appears to be in error.  I was able to replicate both errors in my software exactly as you are seeing them.  See attached. 

In your scenario, the taxpayers should each be distributed their share of the $582 PTE tax paid as a credit on the MD K-1 on Part D, Line 2.   This $582 should also be summarized on Sch B by owner.  If you have $582 on page 1 of the Form 511 line 12, Schedule B and on the MD K-1's you should be able to ignore the diagnostic.  

The same idea applies to the $7,269.  If the amount from page 1 of the 511 matches the Sch B totals then the return is working as expected.  You can ignore the diagnostic.  

We will update the software to correct these informational diagnostics.  They are not helpful to the user in their current state.  

[dsocpa]

Thanks so much for working on that Mark.  Wanted to get the return to the client but was hesitant with the efile error, even though by all outside sources the $$ were accurate.