Savings bond interest previously reported; why is Smart Check showing an error in TT Premier 2023?

[rcsaal]

I have been reporting the increased value of a U.S. Savings Bond-EE inherited from my mother as interest each year since she died.  Then I redeemed the bond in 2023 and received a Form 1099-INT from the bank showing the full amount of interest in Box 3.  Using the interview screens, this full amount was entered in Box 3 of the Form 1099-INT Worksheet along with the other requested adjustment information.  When I reviewed the Schedule B form, under Part 1 Interest, just below a new Subtotal line, there is also now a line entry for "US Savings Bond Interest Previously Reported" with my adjustment amount correctly shown as a subtraction from the subtotal amount.  But later, at the Fed Review Smart Check screen, an error message appears saying: "Schedule B 1099-INT ...Type of adjustment checkbox for Savings Bond-EE cannot be previously reported bond interest since the program does not support this kind of adjustment to Special handling interest... But if Schedule B is now showing the correct adjustment reason and calculation, why is the 2023 Premier program Smart Check showing this error message?  Please let me know how I can override or resolve this error to complete my return then e-file it.  Thanks!

[DianeW777]

Let me see what I might do to help. When I complete the interest entry with the steps below I did not receive an error on Federal Review.

1. Sign into your TurboTax return > Search > Type 1099int > Click the Jump to... Link
2. Check beside 'My accrued interest is included in this Form 1099-INT'.
3. Yes I cashed EE bonds and No I didn't use them for education (tuition and fees, ESA or QTP).  
4. Once finished with the income section there is no error in Federal Review

If you would like to send us a “diagnostic” file that has your “numbers” but not your personal information it would help.  If you would like to do this, here are the instructions: 

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Go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number and your state. This will allow us to open a copy of your return without seeing any personal information.  

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3. Write down or send an image of your token number and state then place in this issue.
4. We can then review your exact scenario for a solution.
5. Please also tell us any states included in the return. This is necessary for us to view the return.

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution. 

[rcsaal]

Thank you DianeW777:

Really appreciate your prompt response and yes, when I updated the Savings Bond interest entries as you suggested, Problem Solved - no error in the Federal Review!

As stated in my original post, I had been reporting the increased value of the savings bond inherited from my mother as interest each year since she died. So that is why I checked the ‘This savings bond interest was previously reported’ reason for the adjustment.  But now, to avoid the Smart Check error, I will instead check the ‘My accrued interest is included in this Form 1099-INT’ box (defined in the ‘Learn More’ box link as “…part of the interest payment you are reporting actually went to someone else…”).

Perhaps a future Premier program update should simply consider combining (with your reason) or deleting ‘This savings bond interest was previously reported’ as a check-marked adjustment if, as noted in the error message: ‘…the program does not support this kind of adjustment to Special handling interest’.