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
@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.
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.