How to resolve diagnostic 59509 in Lacerte

If you're recieving this diagnostic:

Some savings, money market and controlled spending accounts are not eligible for automatic drafts. Please confirm with your bank or credit union if the account you've selected can be automatically drafted. If your payment is returned from your bank unpaid, you will be subject to a "Penalty for Bad Electronic Funds Transfer." The penalty is 10% of the payment (minimum $1.00; maximum $1,000.00).

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This diagnostic is a warning message that appears when an electronic payment (direct debit) is scheduled for the taxpayer using a bank account that may not support automated withdrawals.

Certain types of accounts, such as money market accounts, controlled spending accounts, or even some savings accounts, may reject ACH drafts.

If the payment is rejected, the taxpayer may face a penalty of 10% of the payment amount, with a minimum of $1 and a maximum of $1,000.

Follow these steps to resolve:

1. Go to Screen 3 – Miscellaneous Information / Direct Deposit.
2. Scroll to the North Carolina Direct Deposit/Electronic Payment section.
3. Locate the input field labeled Type of account 1=savings, 2=checking (code 1008).
4. If the current entry is 1 (savings):
   • Confirm with the taxpayer or client whether the savings account can accept ACH direct debit transactions.
   • If it cannot, change the entry to 2 (checking) and enter a valid checking account instead.
5. If the savings account is eligible, no changes are required. You may continue to e-file the return.
6. Recalculate the return if any account information is updated.

This diagnostic does not block e-file and no override is needed. However, you should verify account compatibility to avoid failed payments and penalties after filing.