Can I take the standard deduction for federal and itemize New York state for 2018?

[nikifluff]

I did not figure out how to make adjustments with turbo tax. I printed IT-196 and filled out by hand and I found that if I itemize NYS while I used standard deduction for federal I would save $11,  so I did not itemize NYS. If the savings would have been worth the effort to itemize, I would have amended my NYS return manually and would have resubmitted a signed paper amended return. I  am hoping that the turbo tax folks see all this correspondence and change their approach to NYS (and other states such as MD) so that the software checks to see if we should itemize NYS even thought we take the standard deduction with Federal, and then take us through the steps to complete state and federal returns and support e file of both.

[rjs · Accepted solution]

Yes, for 2018 you will be able to itemize deductions on your New York tax return, even if you take the standard deduction on your federal return. This is covered in the 2018 instructions for Form IT-201, which are now available on the New York tax web site.

[jayneway]

You can see the NYS form 196. Go to the top left black bar, under view click dropdown, click on forms. on the left you will see forms on my return. Just above this you will see open form, click this on. there will be a + box next to 2018 New York. click on this New York + box, a drop down of NYS forms will appear. scroll down to form IT-196, click to highlight and then click the bottom light blue box that says OPEN FORM. Now it should appear. Scroll or  print this form IT-196 to understand and review amounts and calculations to see if you should take the Standard or Itemized deduction for 2018 NYS. If the program calculates that the NYS itemized deduction is more beneficial for you, your NY tax return will X the itemized deduction box.

[rjs]

I don't think we can answer your question at this time. The 2017 instructions for New York say you can't do that. If you take the standard deduction on your federal tax return, you have to take the standard deduction on your New York return. The New York instructions for 2018 haven't been published yet. I don't know whether they are going to change that rule in view of the federal SALT limitation. I think you are going to have to wait to get the answer to your question until New York publishes some information about the rules for 2018.

[lavenderjc]

The NYS Dept. of Tax and Finance says "Beginning with tax year 2018, the Tax Law allows you to itemize your deductions for New York State income tax purposes whether or not you itemized your deductions on your federal income tax return."
<a rel="nofollow" target="_blank" href="https://www.tax.ny.gov/pit/file/itemized-deductions.htm">https://www.tax.ny.gov/pit/file/itemized-de...>

How do I get the NYS taxes to itemize on Turbo Tax? I have union dues to claim.

[carawang]

I  have the same problem. Using standard deduction for federal, and turbo tax automatically use standard deduction for NYS, which is way too low. I'm wondering when Turbotax can make the update.

[rjs]

@pinkytree @lavenderjc @carawang TurboTax will automatically use itemized deductions on your New York tax return, even though you used the standard deduction on your federal return, but note the following.

1. If you are using the CD/Download TurboTax software, make sure your software is up-to-date. See the FAQ at the following link to update your software. (This does not apply if you are using TurboTax Online or the TurboTax Mobile App.)

<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1901183-how-do-i-update-turbotax-cd-download">https://ttlc.intuit....>

2. You must enter your itemized deductions in the FEDERAL Deductions & Credits section of the TurboTax interview, even though your federal tax return is using the standard deduction. There is no place to enter itemized deductions in the New York state interview.

3. Your New York itemized deductions must be more than your New York standard deduction. Some federal itemized deductions are not allowed on the New York return. See the following link for the New York standard deduction for your filing status.

<a rel="nofollow" target="_blank" href="https://www.tax.ny.gov/pit/file/standard_deductions.htm">https://www.tax.ny.gov/pit/file/standard_de...>

4. TurboTax does not highlight the fact that it is using itemized deductions for New York. The only place you will see it, other than on the actual tax form, is on the screen at the end of the New York Interview that says "Let's Review Your New York Numbers." Under the Income heading on that screen it shows you whether it is using the standard deduction or itemized deductions.

[mstrieb]

Is TurboTax making a valid decision to use the standard deduction rather than the itemized deduction for my NY State taxes?  In other words, it chose to use the standard deduction for me, but I can't find any way to see what my itemized deduction would be to make sure TurboTax made the right decision.  (Some quick calculations indicate I should be itemizing for NY State, not using the standard deduction that TurboTax is using.)  Can I tell TurboTax to use the itemized deduction rather than standard?  How would I do this?

[jessicagross86]

TurboTax is automatically taking the standard deduction for New York and I have no option to tell it to itemize deductions. I want to itemize my NY state deductions for 2018 because specifically because the state/local tax deductions don't have a limit like federal deductions do. So how can I tell TurboTax to not take the standard NY deduction and instead itemize deductions for New York.

[rjs]

@jessicagross86  I don't see any way to force TurboTax to use itemized deductions if your New York itemized deductions are less than your New York standard deduction. I don't know why you would do that, since it would mean paying more tax.

The fact that the state and local tax deduction is not capped on the New York return does not necessarily mean that your New York itemized deductions will be more than your New York standard deduction. Keep in mind that state and local income tax or sales tax is not deductible on the New York return, so that reduces your deduction for state and local taxes. The only state or local tax you can claim as an itemized deduction on your New York return is real estate tax.

[nikifluff]

I also don't see anyway to file standard on Federal and itemize on State with Turbo tax. Someone commented that there is no reason to do this, that is wrong advice. My friend is a tax accountant and told me that many of his clients will benefit by itemizing NY while taking standard deduction for Federal, including me. I e filed with turbo tax before I learned this, then checked NY using form IT 201, make sure you use the instructions as there are limits on what can be itemized and some calculations for amounts. I am going to file an amendment to NY manually, its not too hard to do after printing out my turbo tax e file forms. If Turbo tax doesn't fix this for 2019, I will have to use a different provider. Where are you Turbo tax?

[jessicagross86]

@rjs Thanks again for your continued communication.

Yes, I agree that lack of NY cap does not necessarily mean that NY itemized deductions will be more than standard. I'm looking into this issue because of my manual calculation of itemized coming out to more than standard.

When you say "Keep in mind that state and local income tax... is not deductible on New York", I don't see where you're coming from. The main NY "Itemized Deductions" webpage [1] has a "Taxes You Paid" that indicates income/local taxes are deductible. Additionally, line 5 of IT-196 [2] is explicitly for state/local income tax or state/local General Sales Tax (tax payer's choosing). The instructions [3, page 2] don't indicate any limitations or caveats about not being able to take state/local income tax as a deduction. It indicates the deduction can be taken whether or not taken on federal.

[1] Current Itemized Deductions Webpage: <a rel="nofollow" target="_blank" href="https://www.tax.ny.gov/pit/file/itemized-deductions.htm">https://www.tax.ny.gov/pit/file/itemized-de...>
[2] Current IT-196: <a rel="nofollow" target="_blank" href="https://www.tax.ny.gov/pdf/current_forms/it/it196_fill_in.pdf">https://www.tax.ny.gov/pdf/current_fo...>
[3] Current IT-196 Instructions: <a rel="nofollow" target="_blank" href="https://www.tax.ny.gov/pdf/current_forms/it/it196i.pdf">https://www.tax.ny.gov/pdf/current_forms/it/...>

[jessicagross86]

@rjs Responding to myself here. ***I UNDERSTAND NOW*** that state/local income tax is not deductible. The IT-196 form and instructions are EXTREMELY misleading in its organization. Effectively a taxpayer lists state/local tax in line 5 (if not opting for general sales tax), **AND THEN SUBTRACTS IT OFF*** during calculation of line 41 which subtracts from the deduction. It's incredibly silly.

Thank you @rjs for your help and good points.

[passingham142]

anybody have an update on the ny situation? I'm also trying to itemize NY despite taking the standard for federal. Turbo Tax (online version) allowed me to do this for CA.

[jessicagross86]

@passingham142 note to you and everyone that reads this, from my experience: with using TurboTax online, with printing off the returns + worksheets + turbotax worksheets (needed to pay first) I got two helpful NY state worksheets "Subtraction Adjustment Limitation Worksheet" said it was for IT-196 Line 41 and "Itemized Deduction Worksheet" said it was for IT-196 Line 46. With these two worksheets, in conjunction with looking at the IT-196 form and IT-196 instructions downloaded from the NY state, and despite TurboTax online not provided an actual filled out IT-196, I was able to better understand TurboTax's calculations for itemized deductions and deduce that it made the correct decision in taking the standard deduction.