Turbot tax reporting qualified dividends wrong

Are you saying that an incorrect amount is reported as ordinary dividends?

Are ordinary dividends reported on line 3b of the Federal 1040 tax return?

Are qualifying dividends correctly reported on line 3a of the Federal 1040 tax return?  Please clarify.

Your income tax on line 16 may be computed on a Schedule D Tax Worksheet 

or Qualifying Dividends and Capital Gains Worksheet.

@dheysse 

Qualified dividends are included in total ordinary dividends. On a 1099-DIV box 1b, qualified dividends, shows how much of the ordinary dividends in box 1a are qualified. On Form 1040, line 3a, qualified dividends, is the sum of box 1b on all of your 1099-DIV forms, and Form 1040 line 3b is the sum of box 1a on all of your 1099-DIV forms. Form 1040 line 3b includes the amount on line 3a.

My very experienced tax accountant says box 3a Qualified dividends is separate from box 3b Ordinary dividends. The brokerage firm also generates Form 1099-DIV like that: box 1a Qualified dividends is separate from box 1b Ordinary dividends. In other words, Ordinary dividends does not include Qualified dividends, 

contrary to what others replying to this thread have said.

I get a warning when I put zero in box 3b Ordinary dividends and some number in box 3a Qualified dividends. The warning says Ordinary dividends must be greater than Qualified dividends. That means TurboTax is going on the assumption that Ordinary dividends includes Qualified dividends. I think that's wrong, unless TurboTax does its tax calculations in a way that still applies capital gains tax rate to qualified dividends and then subtract qualified from ordinary dividends first, then applies income tax rate to the remaining amount.

Can we get an expert answer here?

In here https://www.irs.gov/publications/p550 , I see the following, which strongly suggests Ordinary dividends includes Qualified dividends, but then whoever wrote this explanation might not fully understand the situation either, and the only accurate explanation is to examine the software code used by the IRS to check our returns.

Ordinary Dividends

Ordinary dividends are the most common type of distribution from a corporation or a mutual fund. They are paid out of earnings and profits and are ordinary income to you. This means they are not capital gains. You can assume that any dividend you receive on common or preferred stock is an ordinary dividend unless the paying corporation or mutual fund tells you otherwise. Ordinary dividends will be shown in box 1a of the Form 1099-DIV you receive.

Thanks for all your well-intended comments, but here is what actually happened.
   I had two1099's that uploaded perfectly. Two of them had qualified dividends. The total dividend and qualified dividend info uploaded correctly.
   I also had cap gains so Turbo Tax calculated my tax using the Qualified Dividends and Capital Gain Tax Worksheet. Turbo Tax did not include both 1099's amounts for qualified dividends in that worksheet: it only picked up one (the smaller one). All the rest of the dividends were treated as ordinary dividends in that sheet, and then on the Form 1040 it did not include all the qualified dividends that were listed on both 1099s. It is a bug in Turbo Tax.
   After calling Turbo Tax support, I told them I would simply delete one 1099 and combine all the info from those two into a single 1099 entry. That fixed the problem and I got about $3,450 lower taxes.

I confirmed all the above by looking at the worksheet itself in the details from the return.

Hello,

Yes.  This is a very confusing topic.  To see how Turbotax handles qualified dividends, go the following Turbotax thread that discusses how to print out all the tax forms (not just the one filed to the federal government).  These additional forms include the qualified dividends and capital gains worksheet which is used to figure out tax on qualified dividends and capital gains.  Disclaimer:  I'm not an accountant but when I used one, my accountant used this qualified dividends and capital gains worksheet to determine the "tax" on line 16 of Form 1040 (Tax).  This line 16 comes from the calculations of the qualified dividends and capital gains worksheet.

Link to How to Print Qualified Dividends and Capital Gains Worksheet:  https://ttlc.intuit.com/community/taxes/discussion/how-do-i-download-my-qualified-dividends-and-capital-gain-tax-worksheet-it-was-not-included-with-the/00/2608871

In brief to Print Qualified and Capital Gains Worksheet from Turbotax:

When you sign onto your online account and land on the Tax Home web page, scroll down and click on Add a state. 

This will take you back to the 2021 online tax return.

Click on Tax Tools on the left side of the online program screen.  Then click on Print Center.  Then click on Print, save or preview this year's return.  Choose the option Include government and TurboTax worksheets