Not Eligible for NJ E-Filing due to the limit of 1000 entries on Schedule B

[farleylai]

Hi, 

TurboTax warns the ineligibility for e-filing NJ tax return for the following reason:

Reason for e-file ineligibility:

Returns with more than one-thousand entries on Schedule B are not eligible for electronic filing.

These rules are set by the New Jersey Division of Taxation.

This is to my surprise as this should have NOTHING to do with Schedule B as TurboTax rejects NJ e-filing ONLY AFTER importing Robinhood 1099-B. What can be affected is likely Form 8949 and NJ-DOP. Nonetheless, it does not make sense if there are indeed so many entries to process in paper forms. One can imagine it can be very common for day traders.

So could you please indicate the source of the rules that explicitly specifies the hard limit of 1000 entries?

There seems like no mentioning of the limitation in the official instructions/FAQ:

    https://www.njportal.com/Taxation/NJ1040/Content/Docs/Instructions/Current_NJ1040Instructions.pdf

    https://www.state.nj.us/treasury/revenue/elf1i.shtml

    https://appengine.egov.com/apps/nj/dor/1040faq

[AmyC]

Yes, NJ limits the filing. NJ 1040 and NJ 1041 E-File Mandate FAQ - NJ.gov under Miscellaneous states: Does e-file support multiple entries on NJ Schedule NJ-DOP, Net Gains or Income from Disposition of Property? (Schedule B for Tax Years 2017 and prior)?

Tax preparers who complete Schedule NJ-DOP for a client using e-file software or New Jersey Online Income Tax Filling may choose to enter one line of information that summarizes all of their client's transactions. Simply enter "various" or "see attached" to describe the kind of property and enter the sum of all transactions in the appropriate fields. The tax preparer must keep a copy of the attachments in their files.

[farleylai]

This FAQ does not seem to say it is a hard limit of 1000 entries.

Perhaps, it's something in their API documentation or you have tested and figured out the limit is 1000 entries?

I am wondering as the limit of 1000 entries does not sound very practical for day traders.

Otherwise, this FAQ also suggests summarization of the transaction entries is acceptable but TurboTax may not support that yet?

[knightluo]

Agreed that this would be a nice feature for TurboTax to add as feature. Is that possible for 2021 return?

[fanfare]

I remember, TurboTax insists on including Federal Schedule B for interest if the total interest is over $1,500.

can you possibly have 1000 1099-INT?

You need do some serious  aggregation of your 1099-INT  documents.

OR

File a paper NJ state income tax return.

[knightluo]

Thanks @fanfare , unfortunately, my blocker is also related to 1000 entries on schedule B. 

It would be good if TurboTax can provide aggregated entries in the NJ-DOP table, and copy of attachment for electronic filing. 

[Conrail_G]

What was your approach here? I finally purchased NJ State after finalizing my federal returns and also have over 1000 transactions. Did you decide to just print out a massive return? I don't see any mention of this limitation in the NJ state tax documentation.

[farleylai]

The 1099 composite from ROBINHOOD CRYPTO LLC is the root cause for large numbers of transactions that can actually be easily aggregated by a tax processor such as TurboTax. 

Here is a sample excerpt:

Date Sold                         Date Acquired

02/09/2021 5.00 47.50 03/12/2020      18.15 0.00 29.35 Sale
02/09/2021 5.00 47.50 03/12/2020      18.14 0.00 29.36 Sale
02/09/2021 5.00 47.50 03/12/2020      18.15 0.00 29.35 Sale
02/09/2021 5.00 47.50 03/12/2020      18.14 0.00 29.36 Sale

So far, the workaround is probably to move out of NJ or find other tax software that can aggregate the transactions for NJ return gracefully.

[fanfare]

You are permitted to aggregate your SELL transactions on your tax return.

You have to do that yourself.

TurboTax, or other tax prep software, won't do that for you.

--

IRS requires details of your SELL transactions to be supplied on some Form 8949,
or on your other forms (e.g. consolidated 1099-B, or spreadsheet) which have the same information and in the same manner as Form 8949.

Either way, if you choose to aggregate (TurboTax calls it summarize) , you have to mail the transaction details to the IRS within three business days of IRS accepting your e-Filed tax return

Detail Reporting Exception: if you summarize Category A or Category D, Form 8949 is not needed for transactions without adjustments. No mailing is necessary.

--

If you aggregate on your federal return, there will be no big list to overflow NJ-DOP.

[Conrail_G]

Correct that for transactions with adjustments (example: wash sale disallowed) one has to furnish a list on an 8949. Federally, this can be done electronically as TurboTax can import all transactions (it automatically summarizes transactions without adjustments that were reported on 1099s).

The issue with TurboTax for NJ is that it claims not eligible for electronic filing: "Returns with more than one-thousand entries on Schedule B are not eligible for electronic filing" and "These rules are set by the NJ Division of Taxation".

I cannot find reference to these rules, and it seems odd that only long returns (hundreds of pages) have to be filed by printing out, that is absurd.

[Conrail_G]

My reference for filing rules is (https://www.njportal.com/Taxation/NJ1040/Content/Docs/Instructions/Current_NJ1040Instructions.pdf).

There is even language about encouraging e-filing, e.g.:

"E-File Mandate. Preparers that reasonably expect to prepare
11 or more individual resident Income Tax returns (including
those filed for trusts and estates) during the tax year must use
electronic methods to file those returns if an electronic filing
option is available. A tax preparer is liable for a penalty of $50
for each return they fail to file electronically when required to
do so."

[fanfare]

why do you have 1000 (or more) 1099-INT documents?

That seems bizarre.

If you have many CDs at a Bank X, add up all the interest and enter

"Bank X" <total interest> on one line.

[Conrail_G]

This has nothing to do with 1099-INT documents as far as I can tell; this is part of the reason for confusion. Federally speaking, the only form with that many entries is Schedule D (capital gains & losses).

[fanfare]

@Conrail_G 

NJ tells you to attach federal Schedule  B if your interest is over $1,500.

TurboTax complies with that.

NJ e-File is rejected if Schedule B has too many items on Line 1.

That was the original topic of this thread.

The issue with NJ-DOP is a separate issue that has been discussed elsewhere.

[Conrail_G]

In my case, Schedule B has only 3 line items in part I and 4 line items in part II. Schedule B Part II does total more than $1,500 but this itself should not be any issue for e-filing.

I do, however, have thousands of transactions in Schedule D. Nonetheless, when I try to e-File with NJ an error is thrown: "Returns with more than one-thousand entries on Schedule B are not eligible for electronic filing".