topic Re: State taxes e-file ineligibility in State tax filing

State taxes e-file ineligibility

secarst — Sat, 27 Mar 2021 21:53:53 GMT

Got notified that I am ineligible to e-file my Alabama state taxes due to the following reason:

Returns with amount reported on Form 40, Pg.2, Part I, line 6, and not equal to the aggregate amount reported as Total Income or (Loss) from all Alabama Schedule E's, line 25, are not eligible for electronic filing.

I likely have typed something in wrong. I am a part time resident of the Alabama for 2020 tax year.

Any suggestions on where to begin to reconcile this issue so that I may e-file?

Re: State taxes e-file ineligibility

AnnetteB6 — Sun, 28 Mar 2021 13:52:09 GMT

The error is pertaining to rental income being reported on your Alabama return.

If there is an amount shown for rental income on AL Form 40 page 2 part 1 line 6, there must be a corresponding Schedule E in the Alabama return showing the same amount.

Re: State taxes e-file ineligibility

secarst — Sun, 28 Mar 2021 14:35:43 GMT

Since I split time in 2020 between AL and another state,GA, I applied the percentage of real estate income to the percentage of time I lived in each state. Is this the correct thing to do? If so, TT won't let me break up that percentage on Schedule E line 23 to reach that appropriate percentage because it applies all of the real estate income to AL and to GA. That set up seems as though I am getting taxed in two states for the full amount as if I lived in both AL and GA all year long.

Re: State taxes e-file ineligibility

ToddL99 — Sun, 28 Mar 2021 16:12:25 GMT

Please clarify - what is your state of legal residence (i.e. domicile)?

Re: State taxes e-file ineligibility

secarst — Sun, 28 Mar 2021 17:43:21 GMT

GA from 1/1/2020 - 7/31/2020

AL from 8/1/2020 - 12/31/2020

Re: State taxes e-file ineligibility

ToddL99 — Sun, 28 Mar 2021 17:54:53 GMT

And, where is the rental property located?

Re: State taxes e-file ineligibility

secarst — Sun, 28 Mar 2021 17:57:29 GMT

VA and NC

Re: State taxes e-file ineligibility

ToddL99 — Mon, 29 Mar 2021 13:59:07 GMT

Based on the information you provided, you must file a part-year resident return for both GA and AL, and allocate the total 2020 rental income to each of those states based on the number of days you were a resident of each. This is done in the income and adjustments interview screen for each state.

Similarly, you would allocate the total 2020 VA and NC rental incomes to each of those states, on a non-resident return. All the VA rental income is allocated to VA; all of the NC rental income is allocated to NC. This is also done in the income and adjustments interview screen for each state.

Sample screenshots of each state interview are shown below (numeric entries are for demonstration only). Allocations must be calculated outside the program, in dollar amounts - TurboTax does not use "percentages" to allocate income.

Re: State taxes e-file ineligibility

secarst — Mon, 29 Mar 2021 21:31:08 GMT

I have this and have all 4 states set up. The AL and GA federal totals are not equal for some reason though. Not sure if the states handle specific deductions differently. When I set them to be the same, I still get the same error on the Alabama return.

Re: State taxes e-file ineligibility

secarst — Mon, 29 Mar 2021 21:38:01 GMT

It appears to be on AL schedule E line 23 which pulls in the total real estate income instead of just the allocation to AL. This is turn affects line 25 and causes the discrepancy with Form 40. It includes AL and GA which is why the discrepancy exists. However, I am not sure how this can be modified on the form without affecting federal and GA.

Re: State taxes e-file ineligibility

secarst — Mon, 29 Mar 2021 22:13:53 GMT

After reviewing all of the forms and modifying the inputs, it appears the TT software does not correctly calculate partial residence on Schedule E's which causes this discrepancy. Unfortunately, it only adds up the lines and does not attribute the amount of times spent in each state there requiring the total rents/royalties to appear on Schedule E. Form 40 correctly lets you note the amount attributed to each state.