My wife and I are both over age 65 and have jointly owned accounts with more than $1600 interest income earned and included in our Montana adjusted gross income. In our 2023 Montana tax return, Married filing Separately, Form 2, Page 5, General Subtractions, Line 3, TurboTax enters a $0 exclusion for me and an $800 exclusion for my wife.
This TurboTax error was a subject of two TurboTax Community discussions last year:
“Montana's Partial Interest Exemption for taxpayers 65 and older (Montna Subtractions Schedule Line 3...” -discussion begun by May507 on 3/9/2023
“Can anyone explain why TurboTax 2021 gave the Montana Senior Interest Income Exclusion of $800 to bo...” -discussion begun by me 3/26/2023
Noteworthy facts:
- Montana Administrative Rule 42.15.215 allows this interest income exclusion for taxpayers and their spouses, and there have been no changes to this administrative rule since 2009.
- In the 2021 Montana tax return prepared with TurboTax 2021 (Costco CD product), my wife and I both correctly received the Montana Senior Interest Income Exclusion of $800 (a total of $1600).
- In the 2022 Montana tax return prepared with TurboTax 2022, my wife was given the $800 Interest Income Exclusion, but I was not. TurboTax 2022 gave me an Interest Income Exclusion of $0.
- The TurboTax software does not allow the user to override and correct this error.
- In 3/2023, after wasting hours in the TurboTax Community discussion (receiving erroneous replies from “TurboTax Employee Tax Experts”) and a 3/28/2023 2.2-hour phone discussion with TurboTax Employee Tax Experts (who tested and confirmed the error and concluded that my Costco 2022 TurboTax CD product was flawed), I admitted defeat and e-filed the Federal and Montana returns for me and my wife.
- In a 3/30/2023 letter to the Montana Department of Revenue, I described the TurboTax 2022 error, and they agreed that Montana Administrative Rule 42.15.215 allows me and my wife to each receive the $800 Interest Income Exclusion ($1,600 total) in our Montana – Married filing Separately tax return.
- Montana Department of Revenue dealt with the TurboTax 2022 reporting error by sending me a 4/4/2023 Adjustment Notice, giving me the $800 interest exclusion, thereby reducing my MT 2022 income tax. In summary, Montana Department of Revenue allowed both me and my wife to receive the Montana Senior Interest Income Exclusion of $800 (a total of $1600) for Tax Year 2022.
To my dismay, TurboTax 2023 has the same error as TurboTax 2022 and again enters a $0 Montana Senior Interest Income Exclusion for me and an $800 exclusion for my wife.
Is TurboTax not capable of acknowledging and fixing this error with the Montana Senior Interest Income Exclusion for qualifying taxpayers and spouses over age 65?
