Troubleshooting Lacerte diagnostic ref. 395 - Form 1099 state withholding

The following critical diagnostic is generating in the Individual module of Lacerte:

• e-file: Pension, IRA #X: e-file state #X, For every state in which state withholding exists on Form 1099-R, the states postal abbreviation must be entered in the "St" column and Local Electronic Filing Grid in the Pensions, IRA, Distributions input screen. (ref. #395)

Why is this diagnostic generating?

The state postal abbreviation and ID number are required for e-file if withholding is input for the 1099-R.

Follow these steps to resolve this diagnostic:

1. Go to Screen 13.1 Pensions, IRAs (1099-R).
2. Select the applicable 1099-R with state withholding from the left navigation panel.
3. Scroll down to the State and Local section.
4. Under the Electronic Filing grid, enter the (15) St and (15) State Identification Number.
5. Repeat steps 1-4 this for all 1099-Rs with state withholding.

If the diagnostic is still generating after completing the steps above, proceed with the instructions below.

Follow these steps if the diagnostic is still generating:

1. Go to Screen 13.1 Pensions, IRAs (1099-R).
2. Select the applicable 1099-R with state withholding from the left navigation panel.
3. Locate the State(s) column in the quick entry grid at the top of the screen.
4. Make sure you entered the applicable state.
   • The most common issue is entering US as the state in this field. If you change to the state of withholding, the diagnostic shouldn't generate anymore.
   • If you try to change the state and it's grayed out, press OK and it'll update correctly.
5. Repeat steps 1-4 for all 1099-Rs with state withholding.

If the diagnostic is still generating after completing both sets of steps above, proceed with the instructions below.

Follow these steps if the diagnostic is still generating after both solutions above:

1. Go to Screen 1, Client Information.
2. Mark the box labeled Multi-State Return?
3. When the box to add an additional state appears select Cancel.
   • This will leave the checkbox marked.
4. Go to Screen 13.1 Pensions, IRAs (1099-R).
5. Mark the form for the state that has the withholding amount in the State(s)(Ctrl+T) (code 850) field.

If the diagnostic is still showing, delete the 1099-R input and reenter the info, leaving the Multi-State Return? box checked and the State(s) field marked only with the state and not the federal.