Issue with North Carolina Taxed Pass-Through Entity Income (New for 2022)

[ncdev]

I have a K-1 from my LLC S Corporation that has a value for "Taxed Pass-Through Entity Income (New for 2022)" since I paid state taxes via my LLC this year. I've entered this into Turbotax for my NC K-1 for "Share of North Carolina Taxable Income, if the amount is greater than zero", but when I look at the forms that Turbotax generates, that value is not getting filled out on line 38 of D400 Sch S (Page 2).

I do see another area outside of the K-1 called "Other Business Deductions From Income" and has a field for "Taxed Pass-Through Entity Income (New for 2022)" but it says "Do NOT enter Taxed Pass-Through Entity (PTE) Income from a North Carolina partnership, S corporation or fiduciary returns here. North Carolina PTE income can be found on your NC K-1 Supplemental Schedule, line 38, Taxed Pass-Through Entity Income and should be entered in the K-1 section."

Regardless, as a test, I added the value from my K-1 into that field, and when I inspect line 38 of D400 Sch S, it has the value I entered. But I'm hesitant to leave this since Turbotax said very explicitly that I should not enter the Taxed PTE this way.

Is this an issue with Turbotax, or am I misunderstanding something? 

[taxick]

I am having a similar problem on the S-Corporation return itself.  Line 38 of the NC-PE is blank, which I believe is what is supposed to flow through to the K-1.  I was on the phone with Turbotax for over an hour and their solution was to upgrade to "Live."  I think it is  a problem with the software.  Anyone found a solution to this problem?  Thanks for your help.

[ncdev]

I had the same experience - it seems they want me to pay to help them debug their software (though if it's something I'm just not understanding, I would be willing to pay). 

[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.

@ncdev 

[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: 

At the top menu in the black line at the top of the page go to Online. 

1. From the menu, select Send Tax File to Agent. 
2. You will see a message explaining what the diagnostic copy is.  Click Send and then you will get a Token number. 
3. 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.

@taxick 

[ncdev]

@AliciaP1 Thanks, here's the token number: 1103907

[suhargett]

I can't find the "Other Business Deductions From Income" that you referred to in your post.  I'm using Turbo Tax Deluxe is that the same one that you are using?

[ncdev]

@suhargett TurboTax Premium is what I'm using.

Your State Returns -> NC -> Income -> Other Business Deductions from Income -> Taxed Pass-Through Entity Income (New for 2022) Learn More

But as I mentioned, the "Learn More" says "Do NOT enter Taxed Pass-Through Entity (PTE) Income from a North Carolina partnership, S corporation or fiduciary returns here."

[AliciaP1]

Upon review of your token, there is an issue with the line reporting that we have reported to our tech team to correct.  However, you can enter your Taxed Pass-Through Entity Income under Other Business Deductions from Income section (and ignore the Learn More recommendation at this time) to continue filing your return and not wait for the update.

@ncdev 

@suhargett 

[suhargett]

Right, thanks so much! I couldn't even find what you were talking about so now I need to know if I need an upgrade or if will I be able to use the version I already bought. I know not a question you can answer for me. (Smile) Don't want to spend an hour on the phone to find out but I guess I will have to do so!

[suhargett]

How do I enter my Taxed Pass-Through Entity Income with the Turbo Tax Deluxe? Thanks!

[suhargett]

I don't  see Other Business Deductions from the Income section. I'm using Turbo Tax Deluxe. How do I enter North Carolina Taxed Pass-Through Entity Income (New for 2022) in Turbo Tax Deluxe?

[AliciaP1]

You need to review your state taxes entries again.

To do this in TurboTax Deluxe Desktop you can follow these steps:

1. Within your return under the State Taxes tab click Go over North Carolina again
2. Continue through the screens until you get to the Here's the income that North Carolina handles differently screen and scroll down to Other Business Deductions from Income and click Start
3. The bottom box on the Other Business Deductions from Income screen is the Taxed Pass-Through Entity Income (New for 2022) and where you want to enter your taxed income from your PTE

@suhargett 

[ncdev]

@AliciaP1 Thanks for the reply and the info. I'm going to wait as I'm in no rush to file my taxes. And I'd really rather not fill in a number when the software is telling me "Do NOT enter" it.  Do you have an ETA when the software will be corrected?

[tbrookie]

The workaround may trigger an audit as the Form K-1 Supplemental Schedule, Line 38 is not being updated.