Montana's Partial Interest Exemption for taxpayers 65 and older (Montna Subtractions Schedule Line 3 Column A)

[May507]

Why is Turbo Tax calculating zero dollars for this taxpayer (Column A, on status married filing separately on same form)  when there is entered taxable interest that should qualify?

What makes me question the programming on this field is that 2022 is the first year both taxpayer and spouse had interest from federal bonds (entered on Montana Subtractions Schedule Line 2, A & B).   The program calculated this exemption correctly for column B spouse -  took the total federal taxable interest, subtracted federal bond interest (already had entered on Line 2 of Subtractions Schedule)  and the remainder interest  resulted in an interest exemption of $356 for spouse.  The same exact situation applies to taxpayer on column A  - remaining interest of $464 should have resulted in an interest exemption.  Why would the program recognize the exemption for spouse and not taxpayer when entered birth dates for both are over 65?          

[JohnW152]

One possibility is that only your wife was listed in the RECIPIENT'S name field on a Form 1099-INT, Interest Income, so the income and exemption are appearing in her name on the Montana Subtractions Schedule if that's what you entered in TurboTax.

Or, if you and your wife were listed jointly in the RECIPIENT'S name field on Form 1099-INT, you may have inadvertently entered the form into TurboTax in your wife's name.  To check this: 

1. If you don’t see 2022 TAXES in the left pane, select the dropdown to the right of Income & Expenses on the Hi, let’s keep working on your taxes! page and then select Let’s get started, Pick up where you left off, or Review/Edit. 
   • Otherwise, in the left pane, select Federal, then Wages & Income (This is labelled Income & Expenses in TurboTax Self-Employed)
2. Scroll down and select the Edit/Add dropdown to the right of Investments and Savings (1099-B, 1099-INT, 1099-DIV, 1099-K, Crypto)
3. Select the Review box below each Interest (1099-INT) item displayed
4. On each Let's get the info from your 1099-INT screen, insure that the This 1099-INT belongs to… entry matches what's actually shown on each Form 1099-INT -- you, your wife, or both of you

If this doesn't resolve your issue, please provide more information.  It would be helpful if you listed the 1099-INT amounts, and who the recipient(s) was for each.

[May507]

Thank you for your reply.   I checked all 8 of my 1099-INT worksheets and found that information was entered correctly in Turbo Tax.  With that said, I am providing additional information you requested.

  Below is listed all separate entries made/displayed on my 1099-INT worksheets :   

Taxpayer (Column A on Form 2) :

Box 1 (Interest Income not included Box 3)    @  193.76

Box 8 (Tax exempt Interest - with MT displayed for 'where interest was earned')   @  435.00 

Spouse (Column B on Form 2):

Box 1    @  88.81

Joint (to be split evenly) :

Box 1  @ 23.35,    Box 1 @ 315.85,    Box 1 @  201.05 (3 separate worksheets)

Box 3 (Interest on US Bonds/Treasuries)   @  3147.20,   Box 3 @ 375.00 with 323.74 in accrued interest (2 separate worksheets)

I calculate a $1599 split for Montana Subtractions Schedule Line 2 (Interest of US Bonds/Treasuries) which Turbo Tax also does.  

I calculate  $464 for Taxpayer (Column A) and $359 for Spouse (Column B) for Montana Subtractions Schedule Line 3 (Partial interest exemption for taxpayers 65 and older).  Turbo Tax calculates $0 for Taxpayer and $357 for Spouse.   There may just be a rounding difference when Turbo Tax split Form 2 2b taxable interest @ $2066 Column A) and $1955 (Column B) but I agree with the total of $4021.

I have screen shots of the data source for item in question but unable to attach - Montana Subtraction Schedule Column A  that Turbo Tax calculated at zero and, also, the correct Column B  that Turbo Tax calculated at $356.

Column A shot has  $2066 (Form 2 Line 2b Col A Interest)     Less  $1599 (for Both A and B Sub Schedule US Obligations).  Column B shot has $1955 (Form 2 Line 2b Col B Interest)   Less  $1599 (same as Column A)

 Thanks for reviewing my tax question. 

[May507]

      Unfortunately,  this reply did not address my concern.  As requested, I then sent a 2nd post that provided the specific entries involved but have not received any further response.  I am still puzzled at why Turbo Tax  calculated a zero amount (on Montana Subtractions Schedule, Line 3 Column A) for a partial interest exemption of a Montana taxpayer over 65, who clearly qualifies for this reduction to Montana taxes.  After my review, I believe that there is a Turbo Tax programing error involved, that in certain circumstances, can result in Montana tax filers having to pay more taxes then is correct by law.    I respectfully ask that a Turbo Tax programmer take a look at this item and either explain why Turbo Tax calculation is correct , or if not, initiate a program fix.

I would like to describe my review actions that caused me to finally question the Turbo Tax programming on this item:

1)  I reviewed the 2022 Montana Form 2 Instructions for Line 3 - Partial Interest Exemption for Taxpayers 65 and Older.  I also, double checked all of my Turbo Tax entries involved and am confident that no user error had been made and that I am compliant with the requirements of these instructions.

2)     I studied the 'Data Source' pop ups for the Line 3 Column A amount of $0.00 in question and, compared it to the Line 3 Column B amount that has a correct calculation.   Please see the attachment at end of message for Line 3 Column A Turbo Tax data source.pop up.   I expected Column A to be $467 ( $2066 total Federal Taxable Interest minus $1599 Taxpayer's split of US bond interest jointly owned by Taxpayer & Spouse.)  Instead, the taxpayer received zero of the $467 valid interest that qualifies under $800 maximum.  It seems very strange to me that $1599 for spouse (Column B) US obligations should even appear on this data source for Taxpayer (Column A).   In my situation, both Taxpayer and Spouse are Filing with Status 2a - 'Married filing separately on same form' and all US interest is from jointly held assets.   Could these circumstances be causing Turbo Tax to be subtracting the full cost of jointly held US interest ($1599 + $1599) from the total federal reported taxable interest of taxpayer, to come up with erroneous zero exemption for this taxpayer (Line 3 Column A) ?

3)    I did attempt to override the value in question by going directly into the Forms view.  However, this is a protected field- understandable since it is internally calculated by Turbo Tax.  Therefore, if there is a programming error in Turbo Tax, the user is unable to override it to complete a return.  I would think this should be covered by Turbo Tax's  commitment to an 'Accuracy Guarantee'.

_________________________________________________________________________________________  

 Copy of Data Source Pop Up Screen for Montana Subtraction Schedule, Line 3, Column A :

 Subs Schedule : Elderly int exempt col A

If age 65 or over,

Form 2 Line 2b Col A Interest 2,066.
PLUS

Adds Schedule Oth state muni bonds
less the taxpayer earned portion of interest on U.S. obligations (already excluded) on the Subtractions Schedule line 2:

Subs Schedule US obligations col A 1,599.
Subs Schedule US obligations col B 1,599.
but not to exceed $800 if filing status 1, 2b, 2c, 3, 4 or not to exceed $1,600 if filing status 2a.

The exclusion can not exceed the amount of interest income reported in your gross income. Interest income includes distributions commonly called dividends on deposits or share accounts

See the Montana Form 2 Instructions for additional information.

__________________________________________________________________________________________

[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.

@May507 

[May507]

Thank you for the response and instructions for sending a diagnostic copy of my Turbo Tax .tax2022 file. 

However, I am not comfortable with releasing this information.  In past posts, I have given all entered amounts   that directly affect the field calculation in question:  including an exact Turbo Tax image of the 'data source'  for that field.    Surely that should be enough for Turbo Tax programmers to test and address this issue.           

[BillM223]

The process by which a "token" (a data base key to your sanitized return, so that we can find it) removes all personally identifiable information (by "x"ing it out) before loaded it into our data base. The process is automatic and works quite well. I have seen many sanitized returns, and have had no way to identify the individual, even if I had been so inclined.

The reason that we sometimes ask for the diagnostic file is because it can happen that the issue is someplace else on your return, and a few seconds glancing at your return can save hours of your entering data and us guessing what we need to see.

[pkck4321]

I believe we have the same problem and think there is an an error in Montana State TurboTax 2022. 

TurboTax is calculating zero dollars for the taxpayer in Column A  on Montana Schedule 2 line 3.  We are filing status married filing separately and have entered taxable interest that should qualify.

The partial interest exemption for taxpayers over 65 was listed correctly for myself and my spouse on our 2021 TurboTax. It is listed only for me on our 2022 TurboTax return, but we are both eligible for the partial interest exemption, just like last year. 

We contacted the Montana State Dept of Revenue and were told we should both receive the partial interest exemption for taxpayers over 65 and that this is probably an error in the TurboTax program.