Are you as confused as I was about filling out Page #2 of the State of Arizona 2-page form "Arizona Schedule A / Itemized Deduction Adjustments / For Full-Year Residents Filing Form 140 / 2021"?
Turbo Tax seems (at first) to completely ignore this form.
After reading the very confusing reference on Page#1, line 7 to “contributions to a charity” and stewing on it all with my wife, we finally decided that we needed to populate our total Arizona state income tax withholdings for Tax Year 2021 into Page #1, Line 7 - "Adjustment to State Income Taxes".
But then HOW do we get the 7 lines of Page #2 “2021 Form 140 Schedule A / Adjustments to State Income Taxes” to be filled out?
Answer: We entered the amount of our total Arizona state income tax withholdings for Tax Year 2021 into STATE TAXES / Step-by-Step / “Adjustment to State Income Taxes.”
When I went to the Turbo Tax “Forms”, the 7 lines of Page #2 were automatically filled out!
Bottom line: Turbo Tax does a VERY POOR job of handling for the State of Arizona this particular adjustment to the Federal Itemized Deductions. Especially since the Step-by-Step instruction says “Note: This is not common.”
I beg to differ. Please, Community, correct me if I’m wrong, but this adjustment for State of Arizona withholdings (payments) would be required for anyone who populated this amount as “Taxes you paid” into line 5a of Federal form 1040, Schedule A - Itemized Deductions, and then also itemized on their State of Arizona tax return.
This is buttressed by the fact that the Page #2 form states "Arizona Revised Statutes Chapter 43-1042 was amended to require taxpayers to reduce the amount of itemized deductions for amounts used to claim an Arizona credit even if the amount was deducted on the federal return as state income taxed paid rather than as charitable contributions."
Turbo Tax: Get your act together and handle this in the future both better and with more clarity for the State of Arizona users (purchasers).
