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I'm replying to my own question.  I discovered that I had incorrectly checked a box after the social security information was entered.  The question was: Are you a U.S. citizen who lived abroad in one of these countries?  I had answered YES instead of NO.  Problem solved!

since they are over 19, to be classified as qualifying children for being dependents, they must be (these rules apply separately to each one)  1) full-time students -  meaning enrolled full-time in school (but not online or correspondence schools) during any part of 5 calendar months during the year 2) their absence from your home must be temporary.  3) they cannot provide over 1/2 of their own support    Or regardless of age to be classified as a qualifying relative for being a dependent  1) teavh must have gross income of less than $5200. The money you provide then is not income 2) you must provide ober 50% of their support. (applies separately to each one) 

Thank you kindly for the reply. Unfortunately, not being a tax expert nor lawyer, much of the language is difficult to fully understand. Just using simple common-sense logic, one wonders why we have to pay the IRS 100% and immediately when we owe? But now that the IRS has funds my wife and I need to recover, that range from 7K to 22K, why does the IRS only permit a recovery of $100+, over 20 years? We will never see a full recovery of our money. And since we owe at year's end, why can't we apply that towards the amount we are recovering from the IRS? Where is that rule, that prevents a 100% immediate recovery, or a better rate of recovery, and for a shorter time period?  And why not permit us to use that recovery sum, to apply towards our taxes owed? That just seems logical. Trying to find out if there is a way, and if not, why not?  Again, much thanks.  LB&SW-B

This should not be taxable to New York - where are you seeing this show up on your New York IT-201 - is it on line 9 or 10?  Are there other taxable amounts of 1099-R income that may be showing up on those lines?  The amount of Federal Adjusted Gross Income on line 19 of IT-201 should match up with line 11b on your Federal 1040 return.   You could go back to your 1099-R for that Roth distribution and review your entries there: Box 1 will have the total distribution and 2a should be blank or 0 and Box 7 is code Q Owned any Roth IRA for Five Years? should be answered Yes (based on the code Q) Roth IRA open in previous year should be Yes Nothing else should have any bearing on it being taxable.  Generally speaking, if this Roth distribution wasn't taxable on your Federal 1040, it wouldn't be added as a taxable item on your New York return.  New York does have an Additions section on lines 20 to 24 on IT-201, but none of those lines relate to a Roth distribution.   If you have additional questions, please reply back with as much detail as possible about this situation as that will help us to better help you.      

Thanks for the reply. I filed my local taxes directly with the city and provided the correct info. All set there. I didn’t itemize any deductions so I think you’re right that it won’t impact my fed or state. 

The problem I’m having is that the refund calculator is not starting over at $0. It is starting at what I paid. Then when I update only the sections I need, the refund calculator decreases the amount it says I owe, but once I finish editing all the sections I need and try to submit the refund calculator says I still owe money even though I paid the full amount last year and the refund calculator should so a refund amount that is owed back to me.

Thank you so much for taking the time to respond. The way I worked around this issue in TTax is exactly how you suggested, that is  I reduced the basis of Brick and Mortar portion of the property by the amount that I am adding as a 7yr depreciable property, such that my overall cost basis remained equal to the purchase value - land value. Thank you for the heads up on the depreciation recapture. That recapture will attract ordinary income tax whether I use Sec179 or SDA , right ?   thanks once again.   Rakesh

! If you retired after age 62 or became disabled in the tax year (and had reasonable cause for the underpayment), you can indeed request a waiver.  Deleting the forms using: Online: see How do I view and delete forms in TTO? Desktop: If you are working in the cd/download TurboTax program: On the top right, there is a FORMS button.  Click on FORMS. Locate the form you want to delete. Click on the form name. Below the form, bottom left, select DELETE FORM button.  California's Form 5805 is notoriously "sticky." If it reappears after you delete it, it’s usually because a box is still checked in the interview. Go to the State Taxes tab. Navigate to the Underpayment Penalty section for California. Make sure you select the option that says "I want the Franchise Tax Board to calculate my penalty and send me a bill" (if applicable). By choosing this, TurboTax stops trying to generate the form itself, and since you don't owe anything, the FTB simply won't send a bill.

@marie2023 For some mysterious reason, my latest post on this topic does not appear here.  Was it removed by someone? Forum censorship ? Don't know but here it is again, for reference. In a nutshell, it seems the relevant TurboTax engineering team is informing The Office of The [Intuit] President, and all of us that the software behaves exactly as designed / as implemented (duh...), that this behaviour is intentional and they have no plan or intent to change it or make it more intelligent / user friendly.  I am thoroughly disappointed, especially as a veteran software engineer, I know for sure it can be improved, given correct management directives.  Here FYI is the - second - Intuit email I received. ============================   Hello Gershon, I am reaching out to you on behalf of Intuit’s Office of the President to provide an update regarding the technical inquiry we have been conducting. I'm sorry that I wasn't able to catch you this morning to discuss our findings. I want to start by thanking you again for your collaboration and for providing the diagnostic data that allowed our development team to take a deeper look into the behavior you described. Our developers were able to successfully replicate the experience you shared; however, after a thorough review of the system architecture, they have confirmed that the product is behaving exactly as designed. While I understand this behavior can be frustrating, it is an intentional product feature rather than a technical bug. This specific logic was implemented as a safeguard to avoid duplicate submissions, which historically caused much more significant data integrity issues for our users. Because this safeguard is vital to the stability of the import process, there are no plans to change this functionality for the foreseeable future. I want to sincerely apologize for any inconvenience this has caused or may continue to cause you. We truly value the technical perspective you provided throughout this process, and your feedback has been documented for our product teams to consider for future iterations. Since we have concluded our investigation into these concerns, we will be closing your case at this time. If you have any other questions or concerns, visit the Intuit support website. We have resources, frequently asked questions, and experts standing by to help. Thank you for being an Intuit customer. Warm regards,

I agree with opening post that TurboTax interview is way too vague on this topic.  Thanks @ThomasM125 for clearly reinforcing what the pop-up answer in tax interview explains and, better yet, for adding the solution to make proper entries. SUGGESTION FOR TY2026 IMPROVEMENT:  If TT set 2025 interview with better up-front questions or programming, that would've avoided confusion.   For instance, list non-tax states in interview and specify corresponding instructions right here. 

I don’t see a form that says 5120 but the electronic postmark states in one of the sections “Your Detroit return shows no tax due or refund. Do not mail a paper copy of Detroit Form 5120. Since you filed electronically, the Michigan Department of Treasury already has your return”. Also, in the worksheets, it shows that I answered questions about city resident status, etc.