TurboTax smart check wrong on Business ITC form 3468

[JCH10]

Does anyone know if TurboTax is actually working on a fix?  I can't find anywhere to submit a ticker or error notification, and I don't know if they monitor this community feed and use the posts to trigger an alert and prioritize an update.  We have a few weeks before needing to file, which should be plenty of time to fix this but ONLY IF they are actually working on it?

[maglib]

 So you are claiming credits?  Which credits are you claiming?  Make sure to answer all questions related to the credits especially during K-1 interview there may be more details like Line 20 of the k-1.

If the form was mistakenly triggered (e.g., via a K-1), you can delete it by going to Tools > Delete a form (online) or via Forms Mode (desktop).

What section of the form is showing an error?  If it is the registration section, enter 

"TMXXX99XXXXX" on Line 2a, this will allow you to e-file.  Go under REVIEW forms to see errors which will be in pink.

If you do not have an investment credit but the form is being pulled into your tax return, please do the following to help resolve the issue.  

1. Log back into your desktop program and select the Business tab, and then select Business Income and Expenses.
2. Scroll down to the section titled Less Common Business Situations.
3. Select update/start to the right of the section titled Business Credits.
4. On the next page, select update/start to the right of the section titled Investment credit.
5. On the page titled Investments credits, answer yes to the question asking if you want to take an investment credit for 2023.
6. Select Delete to the right of any investment credits listed.  
7. Proceed through the screens and select Federal Review.
8. The error message should be gone and you should be able to file your return.

   If your claiming the credit under 48C, 48C or under Section 48, you may need to file the new 7220 form by completing it on the IRS website and adding it as a PDF attachment.

@JCH10

[JCH10]

Thanks for your input.  Appreciate your response and suggestions. This is for Form 3468 and here is my most recent post:

I think 3468 is correct, and you have to select b for question 8, which give the 30% credit and allows for the exemption from PWA with the last part of that sentence "...or 48e (d) (3) and (4) apply."  Poorly written but that's IRS style.  TurboTax's flaw is that answering question 8 with either (a) or (b) (both YES) then says we must file Form 7220 which TT does not support.  Answering (b) yes to question 8 should not trigger the 7220 requirement, since the 2nd part of the sentence brings in the <1MW (and other) exceptions.  So it's really the logic in their SmartCheck that needs fixed.  Even if I end up having to mail in my return, I wouldn't file form 7220 since the following statement is directly from the IRS website Instructions for Form 7220 (12/2025) | Internal Revenue Service

If you’re claiming the increased credit or deduction amounts and satisfy the BOC or the One Megawatt exception, you’re not required to file Form 7220. 

[maglib]

@JCH10   Did you respond Yes to question 7 on the 3468?  I  have never used the form.  If you did, you are correct, no 7220 should be needed.  Let me know.  If that doesn't work I will send to someone in TT for further support.  

Hope that works out.

[JCH10]

Yes, box a for question 7 is checked (YES).  And we cannot leave question 8 unanswered.  The 2 yes boxes (a and b) trigger 7220, and the 2 no boxes drop the credit from 30% to 6%.  Thanks for your help.

[maglib]

Last question, have you updated your program to latest version?  Often you must disable security software to get all updates and allow it through.  Some find simpler to temporarily disable it completely, others know how to let blocked programs through.

[maglib]

When did the construction begin?  Also are you claiming the increased credit amount? 

 In the meantime I posted to moderators the issue which I also found others with same issue.  As you are not required to meet the PWA requirements  if 7 is Yes, does it work if you for 8 you choose NA?

Worst case, file by mail can be done.

Then I saw in instructions, added confusion...  https://www.irs.gov/instructions/i3468#en_US_2025_publink1000129044

Increased Credit Amount Statement

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. The statement should include the following.

1. Your name, taxpayer identification number, the facility description (including the owner information, if different from the filer from Part I, line 3b(i) and 3b(ii)), and, if applicable, the IRS-issued registration number from Part I, line 1.

2. If you checked the box on line 7a, a statement that the qualified facility or energy project has a maximum net output of less than 1 MW (as measured in ac) or equivalent thermal energy.

3. For the facility, energy storage technology, or energy project that began construction before January 29, 2023, indicate that you met the continuity requirement under the physical work test or the 5% safe harbor to establish the beginning of construction.

4. For the facility, energy storage technology, or energy project that began construction on or after January 29, 2023, where you qualify for the increased credit amount based on the PWA requirements, complete Form 7220 and attach it to your return.

5. A declaration, applicable to the statement and any accompanying documents, signed by you, or signed by a person currently authorized to bind you in such matters, in the following form: “Under penalties of perjury, I declare that I have examined this statement, including accompanying documents, and to the best of my knowledge and belief, the facts presented in support of this statement are true, correct, and complete.”

@JCH10

[maglib · Accepted solution]

@JCH10  the TT team requested you send a token of the issue.

Go to ONLINE>Send Tax File to Agent

it removes personal info and sent direct to TT.  It will give you a token number that I can provide to them.

Still unsure about IRS directions on this.  

[JCH10]

Ok, just catching up on your last couple of responses.  First of all THANK YOU SO MUCH for jumping in and trying to get all of us some answers and corrective action.  It is GREATLY appreciated.  Yes I have automatic updates turned on, and my program just got updated this morning, but no fix to our problem.  And yes if we check a) Yes for 7, [less than 1 MW], then that should exempt us from all PWA requirements, and TT should use that to remove the trigger for 7220 no matter what box is checked in question 8 when running Smart Check.  That would seem to me be the correct and easiest fix.  If I end up having to mail in my return, I wouldn't file form 7220 since the following statement is directly from the IRS website Instructions for Form 7220 (12/2025) | Internal Revenue Service

If you’re claiming the increased credit or deduction amounts and satisfy the BOC or the One Megawatt exception, you’re not required to file Form 7220. 

[JCH10]

I just the file per your instructions.  Here is the token I received back:

1318421630-99169899

[JCH10]

First part of that token before the dash got removed (flagged as a phone number?)  s/b 1318421630-99169899

[DawnC]

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 (increased credit amount statement) for each facility, energy storage technology, or energy project, to your return.  

Box 8a should not require Form 7220 and we will get that updated.  

The statement should include the following:

1. Your name, taxpayer identification number, the facility description (including the owner information, if different from the filer from Part I, line 3b(i) and 3b(ii)), and, if applicable, the IRS-issued registration number from Part I, line 1.
2. If you checked the box on line 7a, a statement that the qualified facility or energy project has a maximum net output of less than 1 MW (as measured in ac) or equivalent thermal energy.
3. For the facility, energy storage technology, or energy project that began construction before January 29, 2023, indicate that you met the continuity requirement under the physical work test or the 5% safe harbor to establish the beginning of construction.
4. For the facility, energy storage technology, or energy project that began construction on or after January 29, 2023, where you qualify for the increased credit amount based on the PWA requirements, complete Form 7220 and attach it to your return.
5. A declaration, applicable to the statement and any accompanying documents, signed by you, or signed by a person currently authorized to bind you in such matters, in the following form: “Under penalties of perjury, I declare that I have examined this statement, including accompanying documents, and to the best of my knowledge and belief, the facts presented in support of this statement are true, correct, and complete.”

Form 3468 Instructions

[maglib]

I will send it to them.

[maglib]

@JCH10   It appears the program is functioning correctly for Form 3468 box 7a/8b combo being used.  that when line 7a/8b is used to claim an increased tax credit, a statement is required, and under number 4, it specifically requires Form 7220 for the 8b box.

That being said, Form 7220 should not be required if Box 8a is checked. Overall the program is operating correctly if 8b is checked but not if 8a is checked and I will get this reported asap. Thank you again for bringing this to us!

This may take some time to fix so you can always file by mail.

I'm sorry it is not working 100%.

[JCH10]

Thanks for your continued efforts!  Someone named Dawn at TT is also working on this (maybe she's your contact or you and she are working together) and she has stated something similar.  But it seems to me that if 7a is checked (yes it's less than 1MW), 7220 should never be required no matter what box we check in 8 since the following statement is directly from the IRS website Instructions for Form 7220 (12/2025) | Internal Revenue Service

If you’re claiming the increased credit or deduction amounts and satisfy the BOC or the One Megawatt exception, you’re not required to file Form 7220.