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How to resolve Lacerte Diagnostic ref. 20063 - IRS requires the withholding amount on Form 1040

by Lacerte Tax 2023 Updated 7 months ago

This article will help resolve the following e-file critical diagnostic that is generating for an individual return:

  • e-file: The IRS requires the total withholding amount on Form 1040 to be less than the total of specific categories of income. See More Info. (ref. #20063)

This diagnostic will generate on returns when the amount of federal income tax withheld is greater than the total of certain types of income. It was added to prevent e-file reject F1040-071-03 from occurring.

If you've already entered all of the client's income and this diagnostic persists, the e-filed return will likely be rejected by the IRS. This doesn't mean that the return as prepared is incorrect.

To paper-file the client's return:

  • Go to Screen 1, Client Information.
  • Deselect the Federal box in the Electronic return subsection.
    • This will suppress the diagnostic and update your client correspondence with the appropriate instructions for mailing the return.

To force e-filing (not recommended):

If you believe this diagnostic doesn't apply, you can disable the e-file diagnostic error checking, to transmit the return to the IRS. However, if the return is rejected, you'll need to paper file. To disable the diagnostic, refer to Disabling E-file Diagnostic Error Checking.

Requirements for filing Form 8948

The form instructions indicate that Form 8948, Preparer Explanation for Not Filing Electronically, isn't required when covered returns can't be e-filed because they're not currently capable of being accepted by the IRS.

Lacerte Tax

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