Resident credit for taxes paid to another state -- TurboTax might have filled 'Amount if Different' on my behalf?

[EvguP]

I am a NY resident with NY and NJ (W2) incomes. I have been filing Fed+NY+NJ tax returns for several years by now and noticed that for the last 3 years the amounts of resident credits (line 24a on New York State IT-112-R) have been incorrectly provided (line 23 says NJ, so the credit is from NJ taxes).

I opened TurboTax and went to the 'Tax Computed on Your New Jersey Return'  page, where the 'Calculated Amount' was the correct one (taken from the NJ tax liability for that year), but the 'Amount if Different' had totally random number (higher for two years and smaller for one year of tax returns). I do not remember entering the values in 'Amount if Different'. Could it be that TurboTax suggested them? Could it be that TurboTax started to complain at the stage of checking for errors and suggested those different amounts based on some analysis? If such analysis exists, is it possible to somehow launch it and see how those amount were generated?

[Vanessa A]

Which form did you file first?  Did you file NJ first and then enter your taxes paid to NJ on your NY return?  If not, then it is possible that you entered a number, possibly from your W-2 or it was an estimate.  Do you have income from both NY and NJ?  If so, then the amount may be a prorated credit amount. 

The difference is likely from a question you answered about how or where the income was received or you entered an amount if different. 

If the numbers that you took for your credit are incorrect, did you get a correction notice from NY?  If not, then you would need to Amend your NY state returns for those years.

This year, when you are filing your return, before you submit it, double check the entries.  Also, make sure you are filing NJ first as this will give you the exact number you should be claiming on the NY return.

Multiple States

[EvguP]

Thank you, Vanessa!

I do not remember which form I filed first. However, it is highly likely that it was NY (as it comes as a free state to fill and file in TurboTax; the NJ state return you need to purchase separately).  It is highly unlikely that I would enter that NJ total tax number by myself as I would remember why (and how) I did it. It is highly likely that TurboTax, based on the NJ W2 income, estimated a possible NJ tax and assign it on its own to that field in IT-112-R. The thing is that I do not remember that it ever asked me to validate the number that it provided automatically. If this is the case -- this is a clear limitation of TurboTax which can lead to potential troubles for the clients who use it.  Indeed, now I need to pay not only the difference but also a quite big penalty to NY. 

Yes, I got the notice from NY about this underpayment. Should I request Intuit to cover the penalty payment? That would be logical -- I did not do anything wrong it seems to me.

I tried to calculate all possible differences and could not find the one that matches TurboTax estimate for NJ tax. If I only knew that TurboTax software can do something like this I would double and triple check the return. 

[Vanessa A]

You can call the number on your form from New York and request a penalty abatement. This may lower your overall total penalty if approved.  

If you would like to submit an accuracy guarantee request, you can do so by clicking here and following the instructions in the link.