Colorado State Income Tax Addback

[bepag]

TurboTax has an error in calculating the Colorado State Income Tax Addback (form 104, line 2). Line A1 of TurboTax’s State Income Tax Addback Worksheet is using the full amount of state and local income tax from Schedule A, line 5a. However, the Colorado Department of Revenue’s “Income Tax Topics: State Income Tax Addback” publication specifically states that taxpayers are not required to add back any local income or occupational taxes.

Income Tax Topics: State Income Tax Addback (colorado.gov)

[AliciaP1]

It would be helpful to have a TurboTax ".tax2022" file that is experiencing this issue.

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

In TurboTax Online, 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. 

In TurboTax CD/Download versions, go to the black panel on the top of your screen and select Online. 

1. Scroll down to and select Send tax file to Agent. 
2. You will see a message explaining what the diagnostic copy is.  Click send through this screen and then you will get a Token number. 

Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.   

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.

@bepag 

[bepag]

Token 1129973

[AliciaP1]

Upon review, due to the SALT deduction limitations on your Schedule A, TurboTax is assuming the $17 OPT you paid is in the disallowed portion of the deduction.  It is then apportioning the $10,000 actually taken by the percentage of CO income from the CO 104PN which calculates out to 51%.

@bepag 

[bepag]

I agree that's what is happening. However, that is not how it should be calculated. TurboTax has the ability to identify local income taxes but it doesn't when it gets to the Colorado module. The worksheet should follow the methodology outlined in the publication instead of what it is doing. I was not able to find a way to override it. Since it was not material in my case, and it is the last year I have to file a Colorado return, I let it flow through to the return. It may have a bigger impact on other filers.