Form 3468 is requiring me to use Form 7220. Unable to file electronically

[user17722284177]

I'm deducting for solar panels and battery with less than1 megawatt and I selected the "not applicable" box on line 8, yet TurboTax is telling me I need form 7220, and I am unable to file electronically.  This is a problem and Intuit needs to fix this issue or give us a work around.

[andyoak]

Similar problem here. I'm not able to get the 30% deduction for small systems, it keeps reverting to 6% even though line 7 (<1 mw system) is selected "yes."

Are you at least getting the 30% calculation?

I was on the phone with them for about an hour tonight and I kept explaining that the correct answer to Form 3468 line 8 is "b - N/A" and they kept insisting I have to incorrectly answer "a - Yes" to get 30%, which requires Form 7220. Trying again tomorrow. 

Update 3/19/26: they continue to incorrectly insist that a <1 mw system also has to meet prevailing wage requirements and it doesn't look like they're willing to investigate further. So looks like I'll have to redo our return in a different product.

[andyoak]

I learned that I should be entering the solar credit in Part V instead of Part VI, where it is working to calculate 30%. But that does still trigger the incorrect 7220 filing.

[DawnC]

We are updating the message, credit amount, and the 7220 requirement for e-filing Form 3468.   However, if you checked the box on line 7a or 8b to claim an increased tax credit amount in Part V or Part VI, you must also attach a statement for each facility, energy storage technology, or energy project, to your return.    TurboTax doesn't allow PDF attachments, so in those cases, the return can't be e-filed using TurboTax. 

Which part, II - VII (which credit), are you claiming?    

Form 3468:  You must complete Part I to report facility or property information and the appropriate part (Part II–VII) to compute your investment credit for such facility or property.   Sections:

• Part II—Qualifying Advanced Coal Project Credit, section A.
• Part II—Qualifying Gasification Project Credit, section B.
• Part III—Qualifying Advanced Energy Project Credit.
• Part IV—Advanced Manufacturing Investment Credit.
• Part V—Clean Electricity Investment Credit, sections A through C.
• Part VI—Energy Credit, sections A through N.
• Part VII—Rehabilitation Credit.

[andyoak]

@DawnC I'm using Part VI (Section 48).

The IRS instructions for Form 3468 states that we can e-file and separately mail in the paper statement under Form 8453. (Form 8453 hasn't been updated to add newer 3468 attachments, but the 3468 instructions supersede that and we can leave the boxes unchecked and still use it). I hope you'll accommodate that, otherwise I won't be able to use your service. Please refer to the Note at the bottom of the IRS instructions excerpt below.

Under "Purpose of Form": Complete a separate Form 3468 to claim an investment credit for each facility or property. You must complete Part I to report facility or property information and the appropriate part (Part II–VII) to compute your investment credit for such facility or property.

• Part II—Qualifying Advanced Coal Project Credit, section A.

• Part II—Qualifying Gasification Project Credit, section B.

• Part III—Qualifying Advanced Energy Project Credit.

• Part IV—Advanced Manufacturing Investment Credit.

• Part V—Clean Electricity Investment Credit, sections A through C.

• Part VI—Energy Credit, sections A through N.

• Part VII—Rehabilitation Credit.

Note:

If you are an individual and file electronically, you must send in a paper Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return, if attachments are required for Form 3468.

[RobertB4444]

The software will require an attachment when you get to this point right now.  As @DawnC says above we are updating these requirements.  You can check back and see if they have changed this in the next week or two.

[andyoak]

@RobertB4444 Thank you. Can you tell us if we'll be able to e-file and separately mail in the < 1 KW statement with Form 8453 as per the IRS' Form 3468 instructions?

[DaveF1006]

Yes, you will be able to electronically file and then mail the 8453 and the document within three business days in the filing date of your return.

@andyoak 

[andyoak]

@DaveF1006 Hooray, thank you! @DawnC stated earlier in this thread that we wouldn't be able to efile.

[xcturbotax]

Is the problem fixed? I am using a Premier turbotax PC version and I still get the message saying I need 7220 and does not qualify for efile.

[andyoak]

Nope. All we’ve heard as far as an ETA is it may not be until after 4/15.

[Ribrin]

This is a software bug and not a tax issue. Consequently, it implies a relatively quick programming fix. The IRS clearly states that 1 MgW generation is except from reporting on Form 7220.  Inuit should explicitly say when this fix will happen,  or I for one, will gladly go to a competitor so I can file online versus paper filing. Please update with when this fix will occur. Your inherent comments say you respond to inquiries within hours of posting. I will give you till March 31, 2026 for a response or you will lose me as a customer. Thank you. 

[ludaxkris]

As a software engineer, I can only guess there's probably a good backlog of fixes turbotax needs to address. Even if it's the highest priority, it will still take a few weeks to implement, test, and deploy the fix.

I filed for an extension while I wait for this fix to publish. It is definitely frustrating and I wish they could provide a realistic ETA (they won't due to liabilities). But waiting is better than mailing my taxes in. E-file is the least risky method.

[Ribrin]

Thank you for your comment. But as a software engineer, you know that if you’re business is TAX SOFTWARE you should have resources dedicated and beta testing for any potential changes in the tax laws and a robust process to insure your product is ready for tax season. Apparently this issue caught Intuit, but my review of the other competitors indicates they are do not have this problem. Regardless, since Inuit did not respond in timely fashion for corrective action, I successfully eFiled through FreeTaxUSA. No extensions required, no must file Form 7720, no mail your form, etc. Not only did the input process work as seamless as TurboTax, but its Federal filing was literally free.  Bye bye Turbotax.  

[andyoak]

@Ribo I tried using FreeTaxUSA that and spent hours putting info in, and was impressed with the interface and that it had an interview process for the solar ITC. But it ended up that it couldn’t handle a couple one of my K-1 items and some of my CA state tax adjustments. :( I’ll have to start using a professional tax preparer going forward, I’ve lost so many hours (at least 4 with TT support getting nowhere) and had so much frustration.