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I believe I found the answer online. It appears he does NOT need to claim box 5 as income, since it was through a formal payment arrangement with a government entity. Thank you for your time and great responses!

There may be pension plan forms and schedules in your return in error, maybe from previous years. You can look at the forms and schedules in your program to see what might be there in error and delete them by following these instructions:   1. Choose the Tax Tools option on your left menu bar while working on your return 2. Choose Tools 3. Choose the Delete a form option under Other Helpful links    The Form 5329 does not just report penalties associated with deficiencies in required minimum distributions, it is also used to report things like excess retirement plan contributions. I suggest you look at the corrections requested to make sure they are associated with required minimum distributions (RMD's). If the issue is RMD's, you should review your pension distribution entries to insure you indicated that you are in compliance.

My opinion is that from a tax standpoint, it's probably better for him to claim the child. This way, he gets head-of-household tax rates, which results in lower taxes than if he filed as single. You would then use the single tax rates, but with a much lower income, your marginal tax bracket would probably be significantly lower than his.    However, we know little about your family's overall tax situation. Certain tax credits may be available. Some can only offset the taxpayer's tax liability, while others may be partially refundable (the credit exceeds the taxpayer's tax liability). The two most common are the Dependent Care Credit and the Child Tax Credit. Each of you might be able to make tax-deductible contributions to tax-advantageous plans like IRAs or HSAs.    Unfortunately, online only allows one person's return per account. Thus, when you do your taxes online, you will each need a separate account. There are online tax calculators, but I'm not sureof their accuracy

Yes, my state tax in itself exceeded the standard deduction and was able to be fully itemized due to the increased SALT cap for the tax year, which Turbotax correctly identified. Honestly the excess over the standard deduction was not huge and seems to have an overall net negative affect since I'm required to itemize the state return as well and cannot deduct it there. But TT's software does not function properly in this instance.

Did you enter income from working?   Make sure you have entered your child as a dependent in My Info, and that you have entered the child's Social Security number.    Careful— do not say that your child’s SSN is not valid for employment.  If your child was born in 2025 make sure you said he lived with you the whole year.  There is an oddly worded question that asks if the child paid over half their own support.  Say NO to that question.   If your dependent was a full-time college student, make sure you were careful on the MY INFO screen for “Uncommon situations” and that you indicated there that they were a student.   Have you entered income from working in 2025?  If not,  you will not receive an income tax refund based on having dependent children.     The maximum amount of the child tax credit is now $2200 per child; the refundable “additional child tax credit” amount is $1700.   In order to get that credit, you have to have income from working.   Take the amount you earned from working.   Subtract $2500.   Multiply the rest by 15%.  That is the additional child tax credit per child that you can get—- up to the maximum of $1700 per child.   If the amount you earned  from working was low, you will not get the full $1700 per child.    If your child is older than 16 at the end of 2025, you do not get the CTC.  But you may still get the non-refundable $500 credit for other dependents instead.   https://ttlc.intuit.com/turbotax-support/en-us/help-article/taxation/child-tax-credit/L2lNhfGDl_US_en_US?uid=m68dfq2u   https://ttlc.intuit.com/turbotax-support/en-us/help-article/taxation/additional-child-tax-credit/L6xFeMFEf_US_en_US?uid=lqnuygah https://www.irs.gov/help/ita/does-my-childdependent-qualify-for-the-child-tax-credit-or-the-credit-for-other-dependents     And for the Earned Income Credit—-   https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-credits-deductions/qualifications-earned-income-credit-eic-eitc/L7w4BFP32_US_en_US?uid=m62rmz09   https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant   https://www.irs.gov/pub/irs-pdf/p596.pdf   Look at your 2025 Form 1040 to see the child-related credits you received   PREVIEW 1040 https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-return/preview-turbotax-online-return-filing/L77WCkvnu_US_en_US?uid=m681fkhr   Child Tax Credit line 19 Credit for Other Dependents line 19 Earned Income Credit line 27 Additional Child Tax Credit line 28  

You are seeing this because the amount of Medicare taxes withheld in box 6 is not exactly 1.45% of the Medicare wages in box 5, due to rounding.   DoninGA found that if you remove any cents for the Medicare wages (Box 5), this will clear the need for Form 8959.   Double check your entries for your W2s. You could have a Box 6 withholding error or misplaced decimal point in Box 5 (e.g., entering $50,000.00 as $500,000) will trigger the form. Go to Wages & Income and select Edit/Add next to your W-2. Check Box 5 and Box 6 for every W-2 entered. Ensure Box 6 is exactly 1.45% of Box 5. If it is off by a few cents (e.g., the W-2 shows $145.01 instead of $145.00), rounding it to the nearest dollar may remove the form requirement. If the amount in Box 6 (Medicare tax withheld) is more than 1.45% of the amount in Box 5 (Medicare wages), TurboTax must generate Form 8959 to claim a refund of that overpayment. Even a discrepancy of $1 due to employer rounding can trigger this.   If your W2 entries are correct, delete the form: Select Tax Tools from the left menu, then Tools. Select Delete a form. Find Form 8959 and click Delete. Note: If the data in your W-2 still points to an overpayment, TurboTax will automatically re-generate the form during the final review.

I read somewhere that the form will not be ready until February 1st because of new guidelines that have been implemented. Like starting to have to use a QMID code now! Qualified Manufacturer Identification Number! I heard this is the first time they are requiring this code. Don't know how true this is!

Federal and state refunds come from completely separate entities.  There is no rule as to which one will come in first or how long it will be between their arrival in your account.   TurboTax gives you an estimated date for receiving your refund based on a 21 day average from your date of acceptance, but it can take longer.  “21 days”  is not a promise from TurboTax or the IRS.      First, check your e-file status to see if your return was accepted:  https://turbotax.intuit.com/tax-tools/efile-status-lookup/   Once your federal return has been accepted by the IRS, only the IRS has any control.  TurboTax does not receive any updates from the IRS. Your ONLY source of information about your refund now is the IRS.     You need your filing status, your Social Security number and the exact amount  (line 35a of your 2025 Form 1040) of your federal refund to track your Federal refund:    https://www.irs.gov/refunds   To track your state refund:     https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-refund/track-state-refund/L3jgO8PGs_US_en_US?uid=lt447ebr   If you chose to have your TurboTax fees deducted from your federal refund, that will take some extra time, while the third party bank handles the refund processing     https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-refund/refunds-take-longer-others/L14YlqFrH_US_en_US?uid=lexdr7zh . https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-refund/irs-refund-taking-longer-21-days/L2vRAJbdU_US_en_US?uid=lexe7lst         If you are getting earned income credit on line 27 or additional child tax credit on line 28 You are subject to the delay required by the PATH act.  Do not expect your refund before early March   https://ttlc.intuit.com/turbotax-support/en-us/help-article/internal-revenue-service/federal-refunds-delayed-due-path-act/L5jnQJsBi_US_en_US   Note:  “Accepted” is not the same as “approved”.  TurboTax tells you the e-file was accepted if the IRS deems that there is enough information on the return for them to take it in for processing.   Only the IRS can approve of the refund, which is a later stage of processing.  If the IRS approves your refund they will provide a date for the refund to be issued.

rather than doing Begin and selecting the .tax2024 file for transfer etc, try opening the .tax2024 directly as a return in the 2025 software which will detect prior year version and kick off the transfer process into a new return.  you may have the same issues, but worth a shot.  this has been helpful for people unable to get the transfer to work to begin with.

Thanks very much for your reply.  My other question is the following:  Should the income that I received from the sale of the mineral rights should be treated as long-term capital gains with a FMV of $0? 

Which TurboTax product are you using?  If using TurboTax Online, try Signing Out, clear your Cache and Cookies, then Sign In again.   In TurboTax Desktop, go to ONLINE at the top to 'check for updates' (there may be more than one).   Here's more info on Energy Credits.   @dhtemple74