Processing Federal Form 4868 error message on state returns

[Lukepccpa]

E-filed Form 4868 back in April.  Just finished preparing the Federal 1040 and I can't e-file it because the taxpayers have an EIC and only SE income.  When I try to efile the Missouri and Iowa returns, they won't let me because they are giving me an error message

"Processing Federal Form 4868.  The Federal return is in the process of electronically filing Form 4868.  Therefore the error checks needed to electronically file federal tax return may not have been cleared.  The state return can not be filed until the electronic filing of Federal Form 4868 is complete".

There are no error messages on the Federal return and the Form 4868 has been accepted by the IRS and updating the Form 4868 acknowledgment doesn't work. (It used to in prior years).

Any suggestions?  

[Just-Lisa-Now-]

"I can't e-file it because the taxpayers have an EIC and only SE income".

I dont understand why this precludes Efiling.

Some states cant be Efiled unless the Fed was Efiled as well.

https://proconnect.intuit.com/community/individual/help/ef-atlas-federal-state-ef-method-standalone-...

[Terry53029]

Agree with Lisa, EIC, and self employment income does not prevent efile. Make sure you have unchecked box in part VII "file form 4968" If left checked you will have issues

[Lukepccpa]

The error message I get if I try to efile the Fed is "Your client's federal return is not eligible for electronic filing for the following reason: All earned income for the Earned Income Tax Credit (EITC) is calculating from undocumented sources"   It's a common error if you have self employed's with no kids who qualify for the EITC.  But that's not the point or the issue.

Missouri will let you efile without a Federal return being efiled.  But for some reason the efiled Form 4868 is hanging up the process of elfiling the state this time.

[BobKamman]

Everyone knows that self-employed people with low income and kids are crooks.  IRS should be congratulated for protecting the revenue this way.  But it gives me an idea.  Why not prohibit unvaccinated taxpayers from e-filing?  

[Lukepccpa]

Unchecking the "File Form 4868" box worked. 

I just printed off the Form 9325 for my file before I unchecked the box so I had a record of the Submission ID Number for the extension, then unchecked the box.  That cleared up all the errors.

[Just-Lisa-Now-]

I thought there was issues early in the season with the EIC if you were using the "lookback", but I thought that was corrected in an update at some point.

[Just-Lisa-Now-]

"Your client's federal return is not eligible for electronic filing for the following reason: All earned income for the Earned Income Tax Credit (EITC) is calculating from undocumented sources" 

I thought this was an error early in the season when you chose to use the Lookback for EITC....I coulda sworn they fixed it though, I havent seen anyone mention it since back in March. 

You may want to try and use REPAIR updates from the Windows Programs menu under the PS 2020 heading.

[Lukepccpa]

The error message also says "These rules are set by the Internal Revenue Service Electronic Tax Administration", so I doubt that it is an error.

This isn't something new.  I've run into it in previous years where if you had taxpayer that qualifies for the EITC with no kids whose only income is self employment income.  If you qualify for the EITC and have kids and only self employment income it is not an issue.  It's when you don't have kids that the error is triggered.  I think it's a way to screen for fraudulent EITC claims by requiring those returns to be manually filed instead of letting them zip through the e-file system.

But then again, that wasn't the point of my original post.  I only put that in to answer the inevitable question of why I wasn't e-filing the Federal return. 

My main issue was the Form 4868 supposedly being "in processing" and not allowing me to e-file the state returns while manually filing the Federal return.

[BobKamman]

That's really weird -- isn't the EITC usually less than the SE tax, so the taxpayer still owes money?  Or maybe with the recent changes to EITC for non-taxpayers with non-children, it can sometimes work out to a refund.