I received an audit on my NYS taxes. It looks like I entered $75,000 instead of $7,500 for the amount of real estate taxes paid. Why didn't turbo tax catch this?

[SweetieJean]

How would the program know this is wrong?

[mlk720]

Because it was entered correctly on my Federal return

[VolvoGirl]

You are looking at IRS 1040 Schedule A line 6?

[Opus 17]

If you entered $7500 on schedule A but $75,000 in the state program, there is a possibility that the program made an error.  However this would be very unusual.  It is also possible that NYS created an error when they entered your data, have you checked your printed NY tax form?

Thirdly, there are some other places the error could cause a problem.  Looking at your NY IT-201, is the problem that line34 is too high (your itemized deductions)?  Or is the problem that your real property tax credit on line 67 is too high?  If line 67, this will be your data entry error.  Just because you enter $7500 of property taxes on your federal return does not mean that is all property owned in NYS, or that it is all qualifying residential property for the NY real property tax credit.  So the $7500 from schedule A will flow to NY form IT-201D on line 2 and then to IT-201 line 34, but you were asked separately about qualifying property tax for the real property tax credit.  You may have added a zero there by mistake.

[DoninGA · Accepted solution]

The TurboTax software would have no way to know that you entered an incorrect amount for the property taxes paid.

[Opus 17]

Unless this was on a state-specific section, then you probably claimed the wrong deduction on your federal return too and will need to file an amended return to repay the excess refund due to the mistake.  Instructions are here.   <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/replies/3288565">https://ttlc.intuit.com/replies/3288565</a>

If you agree with the change proposed by NYS, you don't have to file an amended return with them, just send them a check and they will adjust your file.