I am itemizing on both my federal and AZ state return. I am single and am claiming my maximum amount $2,657 in tax credits for charity contributions on form 301 to Private school, public school, foster care, and Charitable Org.
Following the instructions in the Turbo Tax AZ questionnaire, I have entered $0 for these charity contributions on my federal Schedule A, I added the $2,657 as an addition tax payment to my AZ taxes paid on my federal form below my AZ estimated tax payments. I then returned to the AZ questionnaire and entered the $2,657 as a State Income Tax Adjustment where it talks about Safe Harbor application and instructions.
I am getting tax credit of $2,657 reducing the amount of tax that I owe which is how I expected it to work. Nice. The other charitable amounts are the exact same as my federal schedule A has.
BUT that same $2,657 is still showing as an estimated tax payment added to the my other estimated tax payments so I am getting a refund that includes this full $2,657 amount.
It seems to me that this is a Turbo Tax Error in the Arizona tax return software. It did calculate that I didn't exceed the $10,000 limit with this amount but I cannot see anywhere where the State Income Tax adjustment I entered is actually being subtracted back out again. I also have searched and searched where I might enter it but the small font instructions specifically say not to enter the tax credit adjustments within those tax adjustment windows. Frustratingly, I am not allowed to manually deduct the $2,657 on AZ form 140 line 54 a.
Turbo tax, please let us know if Arizona law lets us claim this donation amount as both a AZ tax credit and also an AZ tax payment on our return. If so I can submit this return as it is now.
I hate to blow off adding AZ tax credit "payment" on my federal return because it save me over $700 on that return. Please advise if I should/can somehow override the estimated tax payment to reflect an AZ State Income tax adjustment. The software doesn't seem to do it on its own right now.
This has taken way too much time to struggle through! After this being ruled on by the IRS back in 2018, Turbo tax should have this working clearly in the Premiere Package!
Thanks,
ConfusedinArizona
