You'll need to sign in or create an account to connect with an expert.
It should not be an error. The requirements to file Form 8960 are show below. Included below will be instructions on how to handle the claim of right.
U.S. citizens and residents.
Individuals who have for the tax year
(a) MAGI that’s over an applicable threshold amount, and
b) net investment income, must pay 3.8% of the smaller of (a) or (b) as their NIIT.
The applicable threshold amount is based on your filing status.
The Claim of Right is explained more in the article below. However I will add some information here about how to report on your tax return to determine if it applies to you and how you prefer to enter it on your tax return.
Taking the Income Reduction in TurboTax (most common)
Taking the Credit in TurboTax (Must use TurboTax Desktop)
There are two components to taking the credit in TurboTax. The first part entails determining the amount of the tax that was overpaid in the year the income was received. This requires using the TurboTax Desktop product (or another method) to determine what the tax liability would have been without the income.
But TurboTax is subtracting the $5K salary repayment from my total investment income to arrive at the net investment income that the 3.8% tax is calculated on. So on Form 8960, my total investment income is on line 8, then on line 10 TurboTax is subtracting the $5K salary repayment, then line 12 is the Net investment income. Why would the salary repayment reduce my investment income?
It may have to do with the modified adjusted gross income (MAGI) as indicated below in the IRS FAQ about the Net Investment Income Tax (NIIT).
If you would like to send us a “diagnostic” file that has your “numbers” but not your personal information it would help. If you would like to do this, here are the instructions:
TurboTax Online:
Go to the black panel on the left side of your program and select Tax Tools.
TurboTax CD/Download:
If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:
We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.
your choice in the year of repayment is to take it as an itemized addition which should appear on line 16 of schedule A or use the tax credit method.
I agree the repayment is not part of investment income
in TurboTax desktop there appears a worksheet for the 8960
in part III it lists the repayment which should be zeroed out
***
I can't see a direct way to get to it in the interview process. so in the jump to box type 8960 and go to the wks?
********************************
Turbotax warming on the page were the COR repayment is entered.
"in some situations these amounts must be adjusted for the calculation of the NIIT. Turbotax DOES NOT SUPPORT THESE ADJUSTMENTS"
I have TurboTax Online and it doesn't look like the online version supports the credit option, just the deduction option. And it doesn't let me drill down to the worksheet in the online version. I wish I would have known the online version wouldn't work to file my taxes - I would have bought the desktop version!
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
TColby
Returning Member
KarenL
Employee Tax Expert
MarkFL
Level 2
ashughes
Level 1
snw0
Level 1
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.