My return is rejected for F8960-019-04. Will this be fixed?

aherold737 — Mon, 23 Feb 2026 13:04:39 GMT

Re: My return is rejected for F8960-019-04. Will this be fixed?

ee-ea — Wed, 08 Feb 2023 01:36:13 GMT

Why was my TurboTax e-file rejected by the IRS with Reject Code F8960-019-04?

THIS IS NOT A TURBOTAX ISSUE!

REPEAT, THIS IS NOT A TURBOTAX ISSUE!

ONCE MORE, THIS IS NOT A TURBOTAX ISSUE!

The IRS has confirmed a “Known Issue” in their systems which causes valid e-filings to be erroneously rejected. The issue can affect anyone filing Form 8960, regardless of which tax prep service you use.

From the IRS spreadsheet of 2022 "Known Issues":

Business Rules F8960-019-04 and F8960-003 may cause returns to erroneously reject. These business rules need to be modified to reflect the updates to the Instructions for Form 8960 (Tax Year 2022) regarding the Specific Instructions for Line 4a to include Schedule C (Form 1040) amounts reported on Schedule 1 (Form 1040), line 3 and Form 1041, line 3.

Only the IRS can fix this issue!

When will I be able to e-file my taxes? How will I know when the issue is fixed?

You may not be able to e-file until sometime between late February to mid-March 2023. There is no other answer. You must wait until the IRS fixes a known issue in their systems! Be patient!

From the latest IRS’s 2022 “Known Issues” spreadsheet (Row 74),: “Business Rules will be updated sometime in late February to mid-March 2023.”

I'll update this post when we know the issue is fixed, but the best way to know is to check the spreadsheet on the IRS’s website from time to time to see if there have been any updates.

Or you can sit for a notification from TurboTax that may never come...

But I know this is a TurboTax problem, not an IRS problem! I have the evidence…

Your evidence is wrong. The IRS says this is an IRS problem.

Open the IRS’s 2022 “Known Issues” spreadsheet and read Row 74.

TurboTax stinks! I’m going to use H&R Block, TaxAct, FreeTaxUSA, etc.

MANY, MANY users of TaxAct, H&R Block, FreeTaxUSA, and other tax prep services are reporting the exact same erroneous rejection. If you’re receiving this rejection code with TurboTax, your ability to e-file will NOT be different with another tax prep service.

The problem is an IRS “Known Issue” – it is not a problem with any specific tax prep service.

But I just filed with H&R Block (or "H&R Block just accepted my return")

Are you sure your return was accepted by the IRS? Just because H&R Block didn't throw an error/rejection does not mean the IRS has accepted your return!

Is the status of your filing "pending" or "accepted"? If the status of your filing is "pending" then you have not filed and your return is not "accepted" by the IRS.

If your return status is "accepted," check Line 4b of your Form 8960 on H&R Block. Is it $0? If so, compare your H&R Block Form 8960 Line 17 with your TurboTax Form 8960 Line 17. Does H&R Block show that you will be paying a higher "Net investment income tax for individuals"?

If Line 4b is $0, you may be paying an additional 3.8% in taxes on Schedule C "non-passive income" that you are not required to pay! See note for H&R Block users further down in this post.

A TurboTax employee told me to delete Form 8960, or change Line 4a/4b to $0, and then try to e-file again

Sadly many TT employees don't seem to know what they're talking about. Any advice other than, "You must wait for the IRS to fix the issue" is bad advice. It is very likely that your Form 8960 has been filled in correctly by TurboTax. The problem is probably not with your Form 8960.

If I can’t e-file now, I'll just file my return by mail

This is probably a very, very bad idea!

Paper filers are experiencing extraordinary delays - of two years or more – for getting their returns processed and refunds issued. Don’t you think it’s a better idea to be patient and wait until the IRS fixes this particular problem?

Why is TurboTax filing Form 8960? I don’t have rental income (or any other reasons you think you don’t need this form)

The error code “NetRentalIncomeOrLossAmt” from your rejection notice is misleading - it is not a literal description of what Form 8960 is used for. Do not take it literally!

In all likelihood, TurboTax is including Form 8960 because you are required to file Form 8960!

According to the 2022 Form 8960 instructions from the IRS (page 1), you are REQUIRED to file this form if your MAGI (generally the same as AGI, found on Line 11 of your 1040) exceeds one of the following thresholds:

Married Filing Jointly or Qualifying Widow(er) is $250,000.
Married Filing Separately is $125,000.
Single or Head of Household is $200,000.

If Line 11 of your 1040 exceeds the amount above, you MUST file Form 8960.

Why is my Schedule C income/loss included on Line 4a? That’s not rental income!

TurboxTax is completing Form 8960 correctly!

Repeat, TurboxTax is completing Form 8960 correctly!

TurboTax includes your Schedule C income on Form 8960 Line 4a because the IRS instructions for Line 4a (page 6) say you must include your Schedule C income on Line 4a. This is a new requirement as of TY2022, and the IRS's failure to update its systems with this new requirement is why your return was rejected.

Also note, any non-passive portion of that income/loss should be subtracted on Line 4b (see page 6 of the IRS instructions). Any Schedule C income/loss is “non-passive” if it is from a business in which you actively participate. If your non-passive income is NOT deducted on Line4b, you will pay the 3.8% Net Investment Income Tax (NIIT) on the Line 4a amount even though it is not subject to the NIIT.

H&R Block users should read the special note at the bottom of this reply.

TurboTax stinks! “I want a refund” or “I’m calling my credit card company to reverse the charges”

First you should ask yourself these questions:

Do I understand that users of all tax prep services (H&R Block, TaxAct, FreeTaxUSA, et.al.) are getting the same rejection because the IRS has not fixed this “Known Issue” with IRS systems?
Do I really want to re-enter my tax data with a different tax prep service when I am likely to be rejected there as well?
If I get a refund from TurboTax, what tax prep service am I going to use to file my 2022 taxes?

Attention H&R Block Users

There are anecdotal reports that H&R Block software is not subtracting non-passive income on Line 4b, which may result in a 3.8% Net Investement Income Tax (NIIT) being levied on your Schedule C income when that income is not subject to this tax.

Re: My return is rejected for F8960-019-04. Will this be fixed?

BligBlueLaser — Wed, 08 Feb 2023 14:55:06 GMT

You used your Level 15 privileges to move my answer - this exact answer verbatim - on another thread to moderation and then deletion - and then copy paste the exact same thing here?

Congrats on your internet points, loser

Re: My return is rejected for F8960-019-04. Will this be fixed?

taxuser1012 — Wed, 08 Feb 2023 15:16:28 GMT

This is a joke, are you telling us richest and most power organization in the world didn't know about the issue and don't have test server to allow you guys to test before you release your software to the public ?

Also when you said no estimate time for the fix the problem much bigger than what we think.

why the fix takes so much time ? not enough engineer ? what is changed , don't they have QA engineer to test the software before the release ?

I tried 3 times yesterday I got same error, never had this issue before.

the biggest problem with most US companies, they hire burger flipper from oversea to become IT engineer!

Re: My return is rejected for F8960-019-04. Will this be fixed?

TSumm — Wed, 08 Feb 2023 17:20:11 GMT

I cannot speak to everyone else’s experience, but I was able to e-file through HRB last night and my return was accepted ***by the IRS*** within minutes. I was able manually subtract the non-passive income on line 4b and got exactly the same refund number that TurboTax calculated — and for less than half what I paid for TurboTax SE with the same audit support benefit. As a near 20-year Intuit customer, multiple products, not how I would have chosen to do it, but I’ll take it over filing paper and waiting 8 weeks or more for a refund while hoping no one steals my identity in the meantime. I have requested and been denied a refund from Intuit since they didn’t let me make an informed choice about paying to e-file when there was a known issue at least a week before I attempted it. Very poor showing for TurboTax software and customer service, in my opinion.

Re: My return is rejected for F8960-019-04. Will this be fixed?

cjampala — Sun, 05 Mar 2023 07:24:45 GMT

My Federal Tax Return, which was rejected earlier with the reject code F8960-019-04 is now accepted thru TurboTax.

IRS Known Issues site says: Business Rules F8960-019-04 and F8960-003 were causing returns to erroneously reject and were disabled on 2/19/2023 in efile1040x_2022v5.2 Rules Sets.

It appears that there are some other problems with Form 8960 that are not fixed yet.

Re: My return is rejected for F8960-019-04. Will this be fixed?

TiffanyL — Sun, 05 Mar 2023 21:24:18 GMT

@cjampala

Your tax return may be affected by an IRS filing issue outlined in this Best Answer. If so, the IRS forecasts a resolution date of late February to Mid-March 2023.

IRS Known Issues and Solutions Files by Form Family

Forms availability says that IRS Form 8960 is available for use.

topic My return is rejected for F8960-019-04. Will this be fixed? in Get your taxes done using TurboTax

My return is rejected for F8960-019-04. Will this be fixed?

Re: My return is rejected for F8960-019-04. Will this be fixed?

Re: My return is rejected for F8960-019-04. Will this be fixed?

Re: My return is rejected for F8960-019-04. Will this be fixed?

Re: My return is rejected for F8960-019-04. Will this be fixed?

Re: My return is rejected for F8960-019-04. Will this be fixed?

Re: My return is rejected for F8960-019-04. Will this be fixed?