What is New York State form IT-558? Turbotax says I need it for My particular situation, but I have not "Decoupled from IRC" whatever that means

[LenaH]

Form IT-558 is a new form for tax year 2020, which adjusts your federal adjusted gross income. Certain items this year are being added back and subtracted from your federal adjusted gross income. It is similar to previous year Form IT-225, except that it is included items that cover the CARES act. 

Although I am not certain which apply to your particular situation, I have listed two of the most common reasons of why Form IT-558 would be added to your NYS return. 

• Covid-19 related distributions from a retirement plan
  • For distributions taken from retirement plans, NY is requiring that the entire amount be added back to federal AGI, and then taxpayers will subtract out any taxable amount already included in federal adjusted gross income (AGI). 
• Adjustments for charitable contributions
  • Created as a new charitable deduction for those taking the standard deduction on their federal return of up to $300. This amount is required to be added back to income for NY purposes.

There are many other reasons that would require you to file this new NYS form. You can read more about Form IT-558 here: New York tax law update: What you need to know

[nmb10605]

@LenaH  There are many complaints from NY state residents under separate threads related to this form. This form is either not present or not correctly calculating NY state tax.  Users are able to e-file federal returns; but we cannot e-file the NY state return.  

TT software detects an 'error' when doing the file check of the NY state return. Message displayed is  "Pension/Annuities/IRA worksheet: Txble Pens/IRA (Reg Dist). We're still working on updates related to Retirement Distributions that qualify for disaster or covid relief. You can keep working on your return and we'll remove this message when it's ready."

However, there's nothing to fix. I'm not able to make any edits on the displayed page.  I called TT customer service and was told that TT still needs to incorporate NY State Enhanced Form IT-558 into the TT software.  But no date as to when this will be completed has been shared.  There are many unhappy New Yorkers on these message boards who can't e-file NY and don't know when they'll be able to.

[suect1987]

Thank you for sharing this problem with TT. Hopefully someone will get back to us with a proper response and a date when this problem will be resolved.

[RB321]

Can yo up please help me--i have a similar situation and removed the charitable contribution yet the error still shows

[RB321]

I am new to this community chat and have a "token" as I submitted this problem to an agent

[MaryM428]

We'd love to help you complete your tax return, but need more information. Can you please share the token number?

[RB321]

My token is 805014. Thank you.

[MaryM428]

The 558 form is there because for 2020 you can take a charitable cash donation of up to $300 when you take the standard deduction on your return this year.

You can reduce your amount owed, if you take that deduction. To claim the deduction, go to deductions and credits, go though the deductions again until the screen where it tells you that the standard deduction is best for your return.  The next screen will ask if you made any cash charitable donations in 2020 and give you an opportunity to claim up to $300. 

[dsulli3]

how do I get the IT-558 completed in Turbo Tax

[SundayInSalem]

TurboTax will automatically generate Form IT-558, New York Adjustments due to Decoupling from the IRC, if necessary, based on your federal depreciation information @dsulli3.

Here’s now to verify that your New York state return includes Form IT-558:

1. Tap Tax Tools in the left column
2. Tap Tools
3. Select Delete a Form in Tools Center
4. Scroll down to IT-558. Do NOT delete any forms.
5. Click Continue With My Return in the lower right when you are finished

[NY Cali]

I have submitted NYS return with TT and just received a message from NYS that I need to submit more information, i.e., form IT-558. How do I submit that form with the information from my federal state return in TT? And why did TT not identify this requirement for me?

[JosephS1]

Form IT-558 applies if you received a K-1 from a NY Partnership, NY based S Corporation, or were a beneficiary of an estate or trust and the estate or trust reported adjustments to Federal taxable income because of New York State decoupling from the Internal Revenue Code after March 1, 2020.

In a nutshell, New York decoupling predominantly pertains to the limitations that were place on certain deductions for Federal Income Tax purposes which New York State still allows, like total state and local taxes being limited to $10,000 for Federal purposes but still allowed in totality for New York State purposes.

You need to look for the information supplied with the K-1(s) that you received to determine where it applies and check the state adjustment section for where to enter the amount(s).  Your K-1 for New York State, perhaps identified as Form IT-204-IP for partnerships or CT-34-SH for S Corporations should show what needs to be addressed and adjusted and entered on Form IT-558, which TurboTax, both the online version and the desktop version, does support.

The links below will show you the forms and instructions for each form.  To enter in to TurboTax for New York, navigate to "Other New York adjustments to federal income", scroll down to the last item and click "Start" at "Partner, shareholder and beneficiary adjustments".

The codes you need for additions and/or subtractions should be shown on the form or the supplementary information you received.

Once the information is entered, you will return to the Changes to Federal Income screen and you should be able to complete your return for the New York section.

Form IT-558

Form IT-558 Instructions

Form IT-204-IP Instructions

Form CT-34-SH Instructions

@NY Cali