UPDATE: Good News - it appears that TurboTax has fixed the bug for sole proprietors!
We called TurboTax support with a mutual client who is filing as a sole proprietorship using the Desktop Version of TurboTax and we spoke to a manager.
The manager guided us through the process to complete Section 2 of Form 8881 only which allows a business filing as a Sole Proprietorship (or single-member LLC filing as a sole prop) to only claim the Small Employer Auto-Enrollment Tax Credit (EACA/Solo 401k Tax Credit) and not the startup cost credit (i.e. not Section 1 of Form 8881).
The manager guided us through a verification check which confirmed that the return would not be rejected on account of how Form 8881 was completed.
Note: We were not able to test the online version as TurboTax support requires that someone with the online version call TurboTax support to verify.
