Virginia 2021 Form 760PY tax calculation

[themountainsrcalling]

I don't believe Line 17 is calculating correctly on the 2021 Virginia Form 760PY.  Line 16 (Virginia taxable income) on my Form is just over $3,200.  According to the tax table in the 2021 Form 760PY instructions, the tax should be $66 or $67, but my Form says $0.  The final review of the return indicates no errors.  Am I missing something, or does the software need a fix?

[AmyC]

I created a part year return and checked my tax liability against the tables and it is correct. You may have something stuck in your return or something else. So, let's start with stuck. You may want to try cache and cookies first and another browser. If that doesn't work, delete the state and follow the steps.

1. Delete the form, see How to Delete 
2. Log out of your return
   1. Try one or more of the following:
      • Don't use Internet Explorer.
      • Clear cache and cookies,
      • Sign in using a different browser.
      • Sign in using a different device.
3. Log back into your return.
   • Enter the form again.

If that fails and you are still getting a crazy answer, please send a token number which will scrub out your personal information and allow me to see the bones of your return.

To get the token, 

• If you are online, go to tax tools>tools > share file with agent > 6 digit number pops up.
• If on desktop, go to online >send tax file to agent > number pops.

Reply with # here. Please also  @Me in your response.

[themountainsrcalling]

AmyC - Token number is 925550.  Thanks for your help!

@Me 

[themountainsrcalling]

I am using TurboTax for Windows.

[AmyC]

Thank you!  I am looking into your return.

[themountainsrcalling]

AmyC - I don't know if this will help, but [even after paying the $20.00!] TurboTax wouldn't allow me to file the Maryland Form 502 electronically - because on that Form I overwrote Line 11 (to reflect Taxable Social Security for just the period of Maryland residency) and Line 13 (to reflect Military Retirement Income for just the period of Maryland residency).

All income during the period of Virginia residency - including Taxable Social Security and Military Retirement Income - was counted on Line 12 of the Maryland Form 502.

I'm not sure why TurboTax didn't like that presentation on the Maryland Form 502 - it's how the Maryland Form 502 instructions indicate Subtractions From Maryland Income should be reported for Part-Year Maryland Residents.

Thanks again for looking into the Virginia calculation.

@Me 

[AmyC]

The program isn't liking your overrides. It does not sound like they relate to the VA investigation. The investigation is moving up and is out of my hands but still not fixed. Can you cancel the override and enter the information in the step by step section instead for MD to go through? 

[themountainsrcalling]

AmyC - Thank you for your response - I wish I knew how to enter the part-year information in the Maryland step-by-step sections.  The only place I saw in the step-by-step to split Maryland and Virginia pension income was in the 1099-R data - and I don't think I should put anything into those Forms that didn't appear on the 1099 Forms the taxpayer received.

The two numbers I overrode were on Lines 11 and 13, because TurboTax put the entire year's taxable Social Security (Line 11) and taxable military pension (Line 13) on the Form, which resulted in a large negative number for Maryland AGI and no Maryland tax liability.  The taxpayer's Maryland AGI of $409 (after the two overrides) is comprised of 4/12 of their taxable interest income and 4/12 of their taxable Social Security income . . . the rest of the taxpayer's Federal AGI is subtracted via Maryland's pension exclusion (Line 10a) and income received while a Virginia resident (Line 12).

If you could direct me to the place(s) in the step-by-step where I can split payments between the states I would really appreciate it.

How can I find out the status of the Virginia tax calculation issue?  I haven't heard anything since your most-recent message arrived.

Thanks again for your help.

@Me 

[AmyC]

In the MD section, you come to Your 2021 Maryland taxes are ready for us to check.

1. Go to Income and Edit
2. Select Done with Income
3. The next screen says Additional Info for Part Year Residents
4. Enter Non- MD income - this would include social security and pensions, all income not attributable to MD
5. Enter Non - MD losses and adjustments

I know the investigation was turned in but I don't have an update either at this time.

[wes13]

Hi @AmyC.

Did investigation ever lead to an answer? I have a very similar issue with 760PY tax calculation. I've spent over 30hrs on this problem alone and 6 hrs on the phone with TT support (no help!). I started with TurboTax online but purchased desktop to see what was happening on the forms (and override if needed).

For me, TT online pulls in 132k capital gain and 113k 'Fixed date conformity subtraction'. Both of these occurred while I was a resident of FL so I set to 0 when allocating income/paid for VA. After this change, the issue was obvious as my VA taxes owed were very high and did not line up with the small amount of income allocated to time in VA.

Looking at the printed VA returns... TT pulls the -113k gain adjustment into 760PY A1 (Fed) Line 8 'Net fixed date conformity modifications'. When the 760PY INC and 760PY calculations are complete this results in a 113k VA AGI and 110k taxable income (after prorated exemptions and standard deduction). That's obviously wrong. I did not earn 113k while in VA (I only earned about $54 in savings interest).

So where is this 113k coming from? Using TT Desktop and tracing the 113k backwards from source... 

 # 760PY INC (Schedule of Income)
Schedule A Column A1 Line 8 'Net fixed date conformity modifications' -113206
Income and Adjustments Allocation Smart Worksheet > Line 29 Fixed date conformity subtraction 113206

 # Activity Worksheet (rental property address) L/T 4797-Fed/St Adjust
Part IV - Dispositions - Column Form 4797 Long-Term
10. Federal/State adjustment -110,668
...2a. Adjustments carried from the federal return -110,668
1. Federal income/loss 104,544
Part II - Regular Income/Loss
10. Federal/State adjustment -2,538
2b. Other depreciation adjustments -2,538

That's as far as the source links go. Focusing on the larger amount -110,668 I can see that it's also listed on another TT form 'Fed/State Adj' under Asset Dispositions.

The rental property is listed as...
A. Description of Asset Sold - Residential (date acq and sold)
B. If reported on 6252 or 8824 then check (both empty)
C. Federal Gain/Loss 87,206
D. Accumulated Depreciation (1) State: 19,078 (2) Federal 13,805
E. Gain Adjustment -88,998
F. Other Adjustment (blank)
G. Total Adjustment (D1-D2+E+F) -83,725

There is also another asset line for 'Roof' with Total Adjustment -5,943 (remaining depreciation for new roof installed?). And another unrelated line below Passive/At-Risk/Other Adjustment -21,000 (this is the land value). These 3  total to -110,668. Plus the 'other depreciation adjustment' of -2,538 equals -113,206 which is what's getting pulled into 760PY Inc as 'Fixed date conformity subtraction' and grossly misrepresenting income earned while in VA. Any help you can provide would be greatly appreciated.

[AmyC]

We have an active confirmed issue, INV 18785, with VA Form 760C Line 10 Column B combining value with Line 10 Column C. In your case, it sounds like the program is subtracting a negative to create your large positive income. If you want to send a token number which will scrub out your personal information and allow me to see the bones of your return:

To get the token, 

• If on desktop, go to online >send tax file to agent > number pops.

Then reply @AmyC with the #. If you want to call in and have an agent go through it with you, that is another option. Contact Us 

@wes13

[wes13]

Hi AmyC. Token 959555. After a lot of digging, I discovered that I can prevent the federal depreciation data from flowing through to state (VA) via the 'Depr Options' form ("Delete this state's data from Federal file now"). Although this gives me the result I expect for my VA taxes I'm not sure if it's the correct solution. Can you shed some light on this? Note, the token is for the return prior to the Depr Options workaround. Thanks!

[AmyC]

Looking at the 760PY Instructions, page 17 (which is the 24th page of the pdf) and the description for Fixed Date Conformity, You can verify which items should be included, if any. The conformity runs all through the return.  This also goes with your Depr Options worksheet. 

However, I don't see address or state, just xxx. So I can't be 100% certain of what I am seeing and the flow but feel very confident that you are correct. I believe the Depr Options is the culprit. What I don't know is if any of those apply to your situation. You know your history and the state vs federal differences through the years.

@wes13