So it looks like TT finally realized that New York still allows deduction of heloc mortgage interest not used to buy or improve a home. NY didn't follow the federal change back in 2018? to disallow deduction for that type of interest going forward. But TT Online failed to implement that difference - it continued to apply (incorrectly) the current federal rules for NY returns, up through 2020 returns from my experience.
But seems TT finally realized their error, and for first time for 2021 returns I now see a IT-196 worksheet that captures that type of heloc interest. But the worksheet doesn't work correctly for me as TT uses 0 as the home's FMV (checking that heloc + primary loan amounts don't exceed the FMV). So TT disallows the heloc interest it now finally knows to look for. Anyone know how I can enter my home's FMV in NY return to avoid that disallowance?
Same but worse problem though is that this updated IT-196 worksheet also ignores the interest paid on my primary mortgage, possibly due to same missing FMV? My primary mortgage deduction shows correctly in my fed return, and is part of my NY return info, so it's a NY return mistake.
Here's screenshot showing new IT-196 worksheet part 3 for heloc deductible for NY returns. Note it's listing zero FMV on line 3, causing zero heloc interest deduction for line 7, and it's also "forgetting" my primary mortgage interest in line 8. Even though that primary interest is listed correctly right above in Part 2 of this worksheet.