Could you confirm if Turbo tax online premier software does not support 2024 California law disallowing deduction for Intangible Drilling Costs (IDSC)?

[kashyapvijay]

My 2024 California tax return is not adding Intangible Drilling Costs as taxable amount reported on schedule K-1. Even the amended tax return has same issue, in spite of help from the turbo tax support representative. Could you confirm if Turbo tax online premier software does not support 2024 California law disallowing deduction for Intangible Drilling Costs (IDSC)? If yes, what is the solution?

[RobertB4444]

TurboTax Premier does not cover the IDSC at the current time.  You would have to manually enter the income into the California forms and then mail in the return.

@kashyapvijay 

[kashyapvijay]

It is surprising that Turbo tax premier did not implement IDC for California and its support staff was not told about it. The turbo tax support staff were insisting that generated California return is handling IDC correctly and 2024 amended California return was generated and filed with their support even though there was no difference in tax amount before and after amendment. My only reason to use Turbo tax premier for 2024 tax was IDC situation for California. It is very disappointing that not only Turbo tax not support IDC for California but did not disclose this fact to its clients/users.

[DawnC]

You can enter an adjustment on the CA return to negate any IDC entry on your federal return.  

1. Go to Income that California handles differently >> Partnership K-1.
2. Edit the K-1 that has IDC.
3. Enter a zero on Lines 13d and 17f in the CA column.
4. Continue back to the California return summary page.

[kashyapvijay]

These instructions also do not generate correct returns for 2024 California. I had discussion with Patricia V on a separate thread on this community form and her final suggestion was to add IDC in the ordinary income for 2024 California tax return and add a note that this is to account for IDC since the Turbo Tax software is not handling IDC correctly for 2024 California tax calculation.

[DawnC]

I see your other thread - were you able to add back the IDC using the method suggested - On the adjustments screen, you can enter an addition to CA income.  

[kashyapvijay]

Will adding IDC as other income in California tax return will also account for any AMT impact for California tax returns? Thanks. 

[PatriciaV]

Yes. If you correct both Lines 13d and 17f in the CA column of the adjustments page and add back the federal IDC to other income, these entries should adjust California AMT as well.

[kashyapvijay]

When I added IDC as other income adjustment to CA the IDC became taxable income and shows addition CA tax due amount because of this. However, there is no AMT shown in form 540 line 61 but if I manually prepare California Schedule P(540) for Alternative Minimum Tax and 2024 Credit Limitations — Residents, it asks to enter certain amount as AMT in form 540 line 61, which higher than the above mentioned CA tax due amount.  Why is this AMT discrepancy? Thanks.