Georgia nonresident state return errors by TurboTax...

[Elec_PE]

TurboTax Quality Management need to review and revise their (Deluxe Online) software for the Georgia 2021 income tax return, part-year nonresident Schedule 3 and related smart worksheets.

I filed a Georgia 2021 tax return as a nonresident with Georgia-earned income (W-2, two months) and unearned retirement income (1099-R, 10 months). I am eligible for the Georgia Retirement Income Exclusion.

After e-filing the Georgia return, I received a letter from the Georgia Department of Revenue, Taxpayer Services Division reporting TurboTax's error on Schedule 3 and correcting my return / refund amount.

On Schedule 3, Column A, Line 7; TurboTax calculated and reported the Georgia Retirement Exclusion adjustment as -$4,xxx (based on total Georgia income).  Per the Georgia DOR TSD letter, this amount should be -$35,000 (based on all received income, earned and unearned).

This Schedule 3 error resulted in an incorrect Georgia-adjusted gross income (Column A, Line 8), ratio percentage multiplier (Line 9), prorated income deduction (Line 13) and Georgia taxable income (Line 14).

[TurboTax correctly calculated and reported a retirement exclusion of $4,xxx on Schedule 1, Page 1, Line 7a and on Schedule 3, Column C, Line 7.]

On Schedule 1, Page 2; Line 4 is blank. Line 5 is $4,000 (the maximum earned income, retirement exclusion).  Line 16 is $35,000 (the maximum unearned income, retirement exclusion).  Line 17 is $4,xxx (the calculated total Georgia-income exclusion).  The way TurboTax has handled Schedule 1, Page 2 may have contributed to the Schedule 3, Line 7 error.

Due to this error, I am now forced to draft and submit an amended return to the state of residence (with a tax payment and potential penalty and interest).

[SweetieJean]

Why did you  even claim retirement income on a non-resident return?  Or did you live in GA when you received those funds?

[Elec_PE]

I didn't claim residency, retirement income or the retirement income exclusion in Georgia - TurboTax determined these items and amounts based on answering a series of questions.

All income is reported as part of the TurboTax dialog for the Federal return.  [in my case, W-2 income was earned in Georgia as a nonresident.  1099-R retirement income was received in the state of residence.]  The Georgia tax return for part-year and nonresident taxpayers (e.g., Schedule 3) starts with the Federal return data, makes Georgia-specific adjustments, and determines what is taxable, deductible and non-taxable in Georgia. 

Georgia uses out-of-state and total income numbers as a basis for prorated part-year / nonresident deductions and exemptions.  TurboTax is supposed to follow Georgia instructions for that process. 

However, TurboTax has errors in the calculation of Georgia adjustments / basis related to retirement income and the retirement income exclusion.

I hope that helps!

[Gufran]

How were you able to resolve these errors?  I've run into similar problems myself with the output from TurboTax on Schedule 3 (page 1).

I'm a California resident and own a rental property in the state of Georgia. This year I also received a lump sum amount from a deceased parent's brokerage account.  These brokerage account numbers appear on Schedule 3, page1, row 4, but column B and C do not add up to the value of column A.

I too received a letter from the Georgia Department of Revenue stating that I owned additional tax. Essentially, I was taxed on the amount received from the brokerage account. This simply doesn't make sense given I'm a non-resident and this income was not earned in Georgia.

I believe there is a technical bug when Schedule 3 is generated.  The calculated values are incorrect. 

Any luck getting this resolved?

[wilcox6993]

I received the exact same letter with he issues of it not calculating the exclusion properly. Lines 4 and 5 in the GA return do not add up properly, so GA Dept of Revenue corrected the math and wiped out my refund. I now need to file an amended return to get my refund back.  Now I'm not sure if I can do this through Turbo Tax or if I need to file it manually to avoid the same error - do we know if this bug has been fixed?

[kmbayarea]

I own a rental property as a nonresident  but I have been having issues completing the GA returns due to an error on schedule 3 as Turbo tax is not correctly populating information from the federal tax returns. I report loss from the property and  owe no taxes .  I have had no issues with properties I own as nonresident in Alabama and Wisconsin and information from federal tax returns are transferred without requiring any manual adjustments. It's has been a frustrating experience for the past few years and I have been forced to manually override to information on schedule 3 to  generate the tax returns.  I would like to know if anyone else has been encountering the same issue. 

[Puck61]

TurboTax needs to update Schedule 3 for Georgia.  It is not properly allocating the exclusions for US Treasury Interest as a non-resident.  They seem to have issues when you are a non-resident with income from Georgia (in my case Deferred Comp from an old employer, earned while in GA).  So, I have to file to get a refund, but I may have to file paper to ensure it's calculated correctly.  

[DawnC]

Some TurboTax customers who have a Georgia state return and have capital gains reported on 1099-B in their federal return may notice an issue with Georgia Schedule 3 line 8a showing not equal to lines 8b plus 8c.

We’re currently working to resolve this issue. If you’d like to receive progress updates, sign up below.

Sign up Link

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Some TurboTax Online and Desktop customers who are filing a Georgia Schedule 3 for part-year and nonresidents are experiencing an issue. The Georgia Income and Retirement Worksheet is pulling in 1099-DIV entries and rounding up to the next $1. This is causing the GA Schedule 3 to have a Check This Entry because column A doesn't equal Column B plus Column C.

We’re currently working to resolve this issue. If you’d like to receive progress updates, please sign up below.

Sign up Link

[PJB3]

I'm having this issue.  I clicked on the link and it tells me it's been deleted.  Is there any status update on this problem?

[BillM223]

There was an issue with Georgia that was fixed, however, it is not clear to me that you are referring to the same issue. Note that there are more than one issue listed in the thread above.

Can you do me a favor? Can you send me a "token"? A token is a database index that points to a sanitized version of your return (i.e., TurboTax has removed all personal references in the return before putting it in our secure database). Here are the instructions:

TurboTax Online:  

Click Tax Tools in the menu to the left.

Click Tools, and then

Click Share my file with Agent.

A pop-up message will appear. Click OK to send the sanitized diagnostic copy to us.

Provide the token number that is generated onto this thread.

TurboTax Desktop:

Select Online menu if the customer is using Windows. Select “Help” if using a Mac.

Select Send Tax File to Agent.

A pop-up message will appear, and the customer will select, Send. If using Mac "Send Tax File to TurboTax Agent" 

Note: Desktop will save a file to your computer unless you uncheck the box.

Another message will appear. Provide the token number that is generated onto this thread.

At the bottom of your reply (with the token) add "@" "BillM223" (without the space in between and without the double quotes) so I will be notified.

This will let us see what is happening on your return. Thanks.