Hi all,
I'm using TurboTax Home and Business 2024, a MA resident, and subject to the MA 4% surtax; I also file Schedule OJC in MA to get credit for income taxes paid to other states. MA DOR guidance makes clear that the surtax needs to be taken account when (1) figuring any underpayment penalty (i.e., one cannot figure out the penalty based simply on the 5% income tax liability) and (2) determining the limitation on the credit for taxes paid to another state (i.e., the surtax creates a blended rate above 5%, so the limit should be based on that higher blended rate, not 5%). As to the latter, MA has published an online worksheet as to how the limit should be calculated when the taxpayer is subject to the surtax.
In TurboTax Home and Business 2024, (1) the tax liability filled in on MA 2210 is simply the 5% tax liability and does not include the tax liability from the 4% surtax and (2) the limit for the credit for taxes paid to another state is based only on the MA 5% tax and does not include the 4% surtax, which can materially (and incorrectly) lower the credit available.
Neither of these problems can be overridden in TurboTax (or, I couldn't anyway). To get around this, I had to use the free filing on Mass Tax Connect (basically filling in the information from my otherwise completed TurboTax filing, but correcting the Schedule OJC limitation (which had the side benefit of removing any need for the underpayment form).
I hope someone from TurbtoTax reads this and Intuit fixes the implementation of the MA 4% surtax. I'm filed in MA, at least, but now my TurboTax file for 2024 won't match what I filed in MA, so I'd like to fix that. Also, I'd like to be able to file in MA in 2025 with TurboTax.
As a separate (much less important matter), for my CA filing, TurboTax would not correctly enter the amount of the PTE credit actually used (as set forth correctly on CA 540NR) in the PTE credit schedule, even though the related worksheets had the correct numbers. As a result, on my CA filing, the carryover of the unused credit was incorrect. As it was larger and this did not affect any tax amount due in 2024, I decided to file anyway. I expect this issue is one of the TurbtoTax issues that happens only some times, due to the exact sequencing of entries involved (and the switching between step-by-step and forms mode).
