Filing CA state 100S after 1120S, Turbotax says "Form 100S p4-6: Schedule M2 Line 3 total shouldn't be less than or equal to zero"

[abonniestar]

Hi I'm in the final check up for my CA State filing. But the software always errors out at Schedule M-2. My current line 3 is "Other additions", where column (a) is "AAA", column (b) is "Other Adjustments". In Line 3, it automatically fills in "Tax Exempt Interest", and the value filled in column (a) AAA and column (b) Other Adjustments are both 0 right now.  So the total other additions of Line 3 is 0 in column (a) and (b). But it gives me red color and I can't proceed. The software says the total shouldn't be zero. What's going on here and where could I fill wrong? Thank you!

[PatriciaV]

The numbers for the CA Schedule M-2 flow from the federal form. Open Form 1120S p3-5 & scroll down to Sch M-2 Line 3. Green numbers were carried over from the prior year; blue are manual input that can be changed. If there is a zero in any of the lines under Line 3, you may delete them as long as the box doesn't stay/turn red.

If you're unable to delete the zeroes, click "QuickZoom" under Line D in the box at the top of Sch M-2 and open the Sch M2/Retained Earnings Worksheet. It's possible a total from this worksheet is flowing to Sch M-2. Once you fix this worksheet, the other form errors should be resolved.

[abonniestar]

Hi, there is only one line in line 3 from Sch M-2 in my Form 1120S p3-5 and it's called "Tax exempt interest", the value is 0 in column (d) and the color is black. When I click the number 0, the background change to blue but I can't delete the number 0. So the bottom "Total other additions" in Line 3 is also showing 0. I clicked QuickZoom and opened the Sch M-2 worksheet, in Line 'Income- Tax exempt', column "Other adjustments account", the value is black 0, I still can't delete it. When I clicked the 0, the background is also in blue. So if I can't delete 0 in Sch M-2 worksheet and in Form 1120S p3-5, the Red number 0 would be in Form 100S Schedule M-2? And the system prevents me to submit the tax return because of this issue. Please advise how to bypass or where to click initially to delete the value 0 in "Tax exempt interest"? Thank you!

[abonniestar]

Hi, there is only one line in line 3 from Sch M-2 in my Form 1120S p3-5 and it's called "Tax exempt interest", the value is 0 in column (d) and the color is black. When I click the number 0, the background change to blue but I can't delete the number 0. So the bottom "Total other additions" in Line 3 is also showing 0. I clicked QuickZoom and opened the Sch M-2 worksheet, in Line 'Income- Tax exempt', column "Other adjustments account", the value is black 0, I still can't delete it. When I clicked the 0, the background is also in blue. So if I can't delete 0 in Sch M-2 worksheet and in Form 1120S p3-5, the Red number 0 would be in Form 100S Schedule M-2? And the system prevents me to submit the tax return because of this issue. Please advise how to bypass or where to click initially to delete the value 0 in "Tax exempt interest"? Thank you!

[PatriciaV]

If you right-click the number on Sch M-2 Wks for Income - Tax Exempt, and choose Data Source, TurboTax lists the possible sources for this number:

From:

Form 1120S p3-5 M-1, Line 5a Tax-exempt 
if Schedule M-1 is required to be completed

or

Form 1120S p3-5 Sch K, Line 16a 
if the checkbox to suspend Schedule M-1 is checked on Form 1120S, Schedule B, below line 10

or

Form 8916-A Interest income - c 
if Schedule M-3 is required

You'll need to track down the original source of the zero value in order to delete it from all forms. Use right-click + Data Source for any black numbers.

[abonniestar]

Thanks I figured it out-in the initial guided company income tax exempt questions, when the system asks me, I shouldn't fill in 0, instead I should skip the questions. Once I deleted the 0 in the initial answers, the black zero were automatically gone in the forms. There is just no way to delete them manually in the forms although I already traced to the first form where the zero showed up. This should be a system design error. Please report to the TurboTax Business software design team and let them update the software to give user the option to manually deleted any zeros if they accidentally answers any 0 in any of the previous questions which will prevent the system to submit the tax return successfully later. I hope whoever see this post are able to solve their similar problems! 

[Newmotion]

I ran into the same problem and really appreciate you posting your solution.  It worked for me too!

[abonniestar]

Oh I'm glad it helps you!! I stuck there for at least three days just to figure out this issue on my own in the end. 

Cheers!! 

[EWM Consulting]

Thanks a lot!! this helped. I struggled with this as well, even had turbotax support person on call for an hour but could not figure this out. Wish I had read your response before!! 

[slindsey1983]

This was extremely helpful, thank you so much.  It should definitely be a Turbo Tax issue, all 0's should default to blank.

[RickyRacer]

Thank you so much!  I spent several hours trying to make this work, and I didn't think of going back to the "Interview".  In 30 seconds the problem was fixed.  I owe you a beer or something.

Rich