@joeruhl ok, after talking to several TT folks, here is where I landed. The expert I spoke to said he reached out to someone who swears the software is calculating correctly and pointed to their 100% Accurate Calculations Guarantee. However, in discussing with the expert, we both agreed something was funky with the software for the reasons you and I have been discussing...most notably Form 540 Line 43 cannot be higher than $2500. The only way I was able to get it correct on Form 540 was to delete my CA state return and start over. I entered the total adoption costs and then said I don't have any carryover. This got Form 540 Line 43 to show $2500, however, in Schedule P it shows I don't have any carryover. Ironically, in the SMART WORKSHEETS for my CA Return, the math is correct.
I asked the expert what would happen if I hadn't caught this and filed with Line 43 showing the $2500 plus my carryover amount and the IRS came after me. He pointed back to the guarantee and said TT would cover any penalty or interest. After reading the Terms of Service , that is true but it appears that TT will not cover the extra refund you received. So, if your refund as submitted was $10K but after correcting Line 43 to $2500 would be $4K, you would still be responsible for the $6K delta back to the IRS. Hope that makes sense.
