MI-8989 with more than 36 short-term capital gains and losses not eligible for e-filing (2022 Michigan Return for Part-year Resident)

[sban]

I am using TurboTax Premier 2022 and am unable to e-file my Michigan Tax Return. I am getting an error message saying that MI-8989 form with more than 36 short-term capital gains and losses is not eligible for e-filing. Is there any link to the Michigan Tax/Treasury website that anyone could point me to with this rule? I have seen one such document on Michigan Treasury website, but that was only for 2020 Tax return. I am not seeing any such exclusion on e-filing for Tax Year 2022 (https://www.michigan.gov/taxes/iit-forms/2022-individual-income-tax-forms-and-instructions).

[JosephS1 · Accepted solution]

I agree I too cannot find any definitive answer on the 36 transaction exclusion.  However, I do believe I can give you a workaround to enable you to finalize your return and file.  This will entail going back in to the Federal section of your entries and editing most to allow a combined entry.  

This may not be the ideal solution for you as most would prefer a direct import but this does work.  The following screen shows the grouping and your 1099-B will show the transactions per group:

Unless there is only one transaction or one date for sales, click in the circle for "Something other than a date"  and then click on the down arrow for "Various"

If there was only one sale date place that in the next box, if several sale dates, I suggest entering a date in the middle of the year, such as June 30, or so.  The numbers obviously are for example only.  Click continue at the bottom.  

The next screen is usually none of the above but check all the questions for accuracy if any apply, so click continue.

Enter the totals for each group, such as short-term covered, short-term non-covered, etc., although from your statement all of your transactions are short-term and that will enter the data into Schedule D and/or Form 8949.  Net result is instead of multiple entries that exceed the 36 threshold, if that is the case, you will have one summation entry.

The IRS is more concerned with the totals than the individual transactions.

@sban 

[sban]

Thank you for your reply. Since I have already e-filed my Federal return by directly importing all of my transactions from my broker, do you know if I can group my my transactions in the Federal section now and then e-file my Michigan return without re-filing/amending my Federal return?

Also, it seems to me that the restriction was put there by TurboTax with respect to a previous 2020 Michigan Treasury rule, which may be longer valid. In that case, Michigan Treasury should be able to accept the e-filing if the restriction was lifted by TurboTax with an update. Do you know how to report this to TurboTax? Thanks.

@JosephS1 

[AmyC]

I would first save the return that was filed with federal before changing anything. You can change the federal section and regroup as long as the totals match. 

The programmers work with the states throughout the year and can only implement and change as allowed.

[sban]

Thank you. I have filed my MI tax return by regrouping the sales and it has been accepted. Thank you both for your help.

[MoniqueLO_]

Thank you for the update! We are glad you were able to file your return and it has been accepted. 

@sban