NJ Child and Dependent Care not calculating in Proseries

[moshe]

On the 2021 federal form 2441, line 10 is the "new" refundable credit for child care expenses, and line 11, is the nonrefundable credit. In past years there was only a line 11, called the credit for child care expenses.

On the New jersey tax return, in past years, the federal child and dependent care credit would flow through to NJ, on the Child and Dependent Care smart worksheet. Line A, would be the federal credit amount, line B, would be the percentage amount, ect.

It seems, for 2021, Proseries is not calculating any NJ credit, if you take the 'REFUNDABLE' federal credit. If you cross reference Line A, it tells you that its from, Federal form 2441 line 11. That is the same as in prior years, since it was always only Federal form 2441 line 11.

I believe that proseries needs to update the NJ child and dependent care credit to reflect either line 10 of the federal 2441 (refundable credit), or line 11 of the federal 2441 (nonrefundable credit).If it only reflects line 11 of the federal 2441, there will be no NJ credit for all those that are eligible for the federal refundable credit.

[Accountant-Man]

Since when does NJ give a child tax credit?

Line 63 in 2020 was not for dependent care credit.

2021 NJ forms are not ready yet.

[moshe]

NJ gives a Child and Dependent care credit for the last few years.

In 2021 tax returns, it's on line 63.  On 2020 tax returns, it was on line 45.

I believe proseries needs to fix the NJ 2021 Child and Dependent care worksheet.

[moshe]

Does anyone from Proseries read this?

Is there a way for me to email Proseries directly?

[sjrcpa]

"Does anyone from Proseries read this?"

Hardly ever.

[moshe]

It seems that Proseries has not bothered to fix this credit in their software. Had they not done any changes between 2020 and 2021 on this credit, I would've understood that they haven't worked on this yet. The issue is, that they did make some changes between the 2020 software and 2021, yet they got it completely wrong.

If you open the 2021 NJ child and dependent care credit smart worksheet, you will see that on line B, they changed the income percentages to reflect income up to $150,000, which is new for 2021. If you look at the 2020 software, you will see that the percentages are capped at $60,000. This is the only good thing proseries did on this worksheet. Everything else is not good.

Line A- is still incorrect, as it is still mimicking 2020, and reflecting the federal form 2441 line 11. For 2021, it should reflect either line 10 OR 11 of the federal 2441.

Line D- is not applicable for 2021.

Line E- is not applicable for 2021.

Line F- is not applicable for 2021.

If Proseries needs some help figuring this out, they can reference pages 41-42 here.

https://www.njportal.com/Taxation/NJ1040/Content/Docs/Instructions/Current_NJ1040Instructions.pdf

[Just-Lisa-Now-]

Looks like NJ has an update coming out on the 27th....maybe they'll have it fixed?

[moshe]

That's simply not good enough on Proseries part.

We have clients coming in to file, and some want us to file on Monday the 24th, when the IRS opens up.

I understand that we won't be able to actually file the NJ part until next Thursday the 28th, but at least we should be able to give the clients an accurate Federal and State copy on Monday the 24th.

Without Proseries fixing this, the NJ 1040 is totally wrong, and worthless.

A client can go from owing money to NJ, to getting a refund.

They have had ample time to fix this!

[Accountant-Man]

Luckily, I don't have any January 24 clients.

[TaxGuyBill]

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@moshe wrote:

We have clients coming in to file, and some want us to file on Monday the 24th, when the IRS opens up.

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ProSeries isn't scheduled to release several important Federal forms until MARCH 17th.  So you are right, ProSeries is pretty useless.

[moshe]

I was hoping the that Proseries would have the correct NJ 1040 ready by tomorrow, but I guess I was asking too much of Proseries....

[Catmom]

I'm having the same issue on the Kansas return.  Kansas allows a day care credit that is 25% of the federal day care credit.  ProSeries calculated the Kansas credit at zero.  I called Kansas Department of Revenue and they said it should be 25%, period.  It doesn't matter whether it offsets tax on the federal return or is fully refundable.  I called ProSeries and the support technician I spoke with didn't have a clue.  She told me to override.  I've always thought overriding was a bad thing and to avoid it at all costs.  ProSeries should fix the software instead.  

Back to my client....I realized that, on this particular return, it wouldn't change their refund if all of the day care credit was nonrefundable, so I unchecked Box B on the 2441 and made it nonrefundable.  Now the Kansas credit is calculating correctly.  It's a temporary workaround, and it only works if the client has sufficient federal tax to absorb the entire credit.  The ProSeries support technician said she would submit a support request and hopefully it will get fixed.