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Troubleshooting NY diagnostics ref. 43356 and 43357 - Other adjustment amounts require assigned codes in ProConnect Tax

by Intuit•2• Updated 1 year ago

One or both of the following e-file critical diagnostics are generating:

  • e-file: Per the New York e-file specifications, all "Other addition" amounts are required to have assigned codes. Amounts included on Form IT-201, Line 23 (IT-203, Line 22) without assigned codes will not be allowed for electronic filing (ref. #43356)

  • e-file: Per the New York e-file specifications, all "Other subtraction" amounts are required to have assigned codes. Amounts included on Form IT-201, Line 31 (IT-203, Line 29) without assigned codes will not be allowed for electronic filing (ref. #43357)

These e-file critical diagnostics will generate if an amount appears on Form IT-201, lines 23 and/or 31, or on Form IT-203, lines 22 and/or 29, that isn't included on Form IT-225.

Refer to the Instructions for Form IT-225 for a complete list of New York state addition and subtraction codes.

Where do I enter NY State additions and subtractions?

Starting in 2014 New York added Form IT-225, New York State Modifications. All other additions and other subtractions must show on Form IT-225 with a valid adjustment code before flowing to Form IT-201 or IT-203 for e-filing.

Follow these steps to enter NY state additions and subtractions:

  1. Go to Input Return ⮕ State & Local ⮕ Modifications. 
  2. Choose NY Modifications. 
  3. Scroll down to New York Additions.
  4. Enter any applicable fields in this section.
    • Any addition item identified as an override [O] may already come from another input screen.
  5. Scroll down to New York Subtractions.
  6. Enter any applicable fields in this section.
    • Any subtraction item identified as an override [O] may already come from another input screen.

Some additions and subtractions won't flow to Form IT-225, but will flow to their own specific line on Form IT-201 or IT-203.

Below are additions that flow directly to their own specific line of Form IT-201/IT-203:

  • Interest income on state and local bonds - Form IT-201 / IT-203, line 20
  • Public employee 414(h) retirements contributions from your wage and tax statements - Form IT-201 / IT-203, line 21
    1. To enter 414(h) New York taxable retirement contributions from a W-2 follow these steps. Note: entering an amount in Box 14, Other (CTRL+E) is incorrect.
    2. Go into Input Return ⮕ Wages, Salaries, Tips.
    3. Select that W-2. If it isn't entered yet, create a new one.
    4. Scroll to the State and Local section.
    5. Enter the amounts under the 414(h) subsection in the following fields:
      • Taxable retirement contribution
      • Health insurance and welfare benefit surcharge
      • Type of Contribution (required for proper generation of IT-150)
      • Nontaxable retirement contribution
      • If these amounts are not entered correctly, the return may be rejected with New York e-file reject R0103. Enter the appropriate amounts and resend the return.
      • New York's 529 college savings program distributions - Form IT-201, line 22

Below are subtractions that flow directly to their own specific line of Form IT-201/IT-203:

  • Taxable refund, credits, or offsets of state and local income taxes - Forms IT-201, line 25 or IT-203, line 24
  • Pensions of NYS and local governments and the federal government - Forms IT-201, line 26 or IT-203, line 25
  • Taxable amount of social security benefits - Forms IT-201, line 27 or IT-203, line 26
  • Interest income on U.S. government bonds - Forms IT-201, line 28 or IT-203, line 27
  • Pension and annuity income exclusion - Forms IT-201, line 29 or IT-203, line 28
  • New York's 529 college savings program deduction/earnings - Form IT-201, line 30

New York hasn't provided a code for every type of adjustment or scenario. You'll need to paper file these returns.

  • If the taxpayer is reporting W-2 wages that are different for NY than federal (for example, the W-2, box 16 (NY) has a different amount than box 1 for federal). This amount will flow to IT-201 (IT-203) and won't flow to IT-225. In this case, the return is accurate and can't be e-filed per NY e-file specifications.
  • A pension from NYS official should flow to Form IT-201, line 26. Instead the amount is showing on Form IT-201, line 31 and Form IT-225 isn't generating. Diagnostic ref. #43357 is present.

Follow these steps to resolve this diagnostic and correct the return

  1. Go to Input Return ⮕ Income ⮕ Pensions, IRA's.
  2. Scroll down to the State and Local section.
  3. Remove any entry in State taxable amount, if different.
  4. Select the Other Information tab.
  5. Locate the New York subsection.
  6. Check the box labeled From New York state, U.S., or political subdivision.
    • Step 4 should remove the amount from Form IT-201, line 31.
    • Step 7 should place the amount on Form IT-201, line 26.
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