199A QBI Deduction

[Tootallt004]

After entering REIT dividends from box 5 of 1099 DIV, TurboTax Deluxe created and filled in a Qualified Business Income Deduction Summary worksheet.  This is now triggering the message: "If the only 199A income is REIT dividends from one or more 1099 DIVs and your taxable income is over the threshold for your filing status, then you cannot file your return at this time.  This will be supported in a subsequent release."

What release?  When?  Do I need to upgrade to TurboTax Premier or will I get the same message?  

[VictoriaD75 · Accepted solution]

You are receiving dividends from a REIT (Real Estate Investment Trust), which qualifies for a Section 199A deduction. This does not mean you had Qualified Business Income (QBI), but you could qualify for the deduction. REIT dividends are reported on a Schedule K-1 or in box 5 of the 1099-DIV. This requires Form 8995-A, which is expected to be available on February 20, 2020.

Qualified Business Income Deduction

Forms Availability

[PB11]

@VictoriaD75 

>> This requires Form 8995-A, which is expected to be available on February 20, 2020.

Will the form be available on Feb 20 on IRS website, or in TT online? Can you please clarify? 

[ajamato]

Hi, right now turbotax prevents me from continuing and finalizing my returns. I just wanted to confirm as well that the Febuary 20 2020 turbotax software update/release will fix my situation. Will it allow me to proceed with the QBI deduction? Or at least allow me to decline the deduction. The error I am seeing has a bit more detail now:

"Qualified Business Inc Deduction Summary: Total REIT dividends - If the only 199A income is REIT dividends from one or more 1099-DIVs and your taxable income is over the threshold for your filing status ($160, 700 ( $160, 725 if married filing separately) or $321,400 if married filing jointly) then you cannot file your return at this time. This will be supported in a subsequent release."

I believe that my taxable income is over the filing status, and my 1099-DIV had a small amount of 199A income.

There seems to be no option in the turbotax software to decline the deduction (which would be fine for me, as I expect the deduction will be a very very small amount). I am just stuck and cannot proceed to finalize my return. Every time I click "continue" on the QBI Deduction workflow page, it will just keep asking me to finalize it and confirm the numbers. There is no way to proceed to final taxes. 

[VictoriaD75]

The QBI deduction is reported on Form 8995. While the form is not expected to be available for filing, it will still appear as part of your return. You can try deleting the form to see if it will allow you to proceed.

• From the menu on the left, choose Tax Tools
• Click on Tools
• Select Delete a Form
• Scroll through the forms and click Delete next to Form 8995

[MickTheQuick]

I have the same situation as ajamato.  For me, Form 8995 does not appear in the list of forms.  Is there a recommended way within TT to simply decline this deduction?  I was thinking I could just change the amount in field number 9 ("Total REIT Dividends") to 0.  Is this legal/acceptable?  Thanks.

[MickTheQuick]

UPDATE: I since spoke to one of the advisors in TT and he recommended I just change the root entry for 199A Dividends from my 1099-DIV to zero (it was a whopping $44).   This effectively solved the problem and I was able to complete & submit my return.  

[Tootallt004]

I am not a CPA.  However, I went in as suggested elsewhere and zeroed out the REIT dividend disclosure number on my 1099 DIV and this caused the software to eliminate the edit error related to this issue.  I did not want to wait until February 20th to wait to file for a large refund for what amounted to a $12 deduction with a $3 tax impact.  Many people with American Funds mutual funds are experiencing this.  I made sure that the REIT dividends in question were included in lines 1 and 2 of the 1099 DIV to make sure that they were included in income, and they were.  The line 5 entry in the 1099 DIV appears to be only  a disclosure item that could then be used in the 199A calculations.

[AmyC]

The QBI is named for the section 199a dividends. For those of you anxious to file, deleting that entry on your 1099DIV will eliminate the QBI so you can file.

The IRS does expect you to take deductions to which you are entitled.  As long as the choice is not affecting your other credits and deductions, there should not be a problem.

[ajamato]

Hi, I just want to get a clear answer on this question.

On Feb 20, will everyone be able to file through TurboTax or not? Or will some users, based on their income level still be unable to proceed and file?

[ThomasM125]

You will be able to file when the update has been posted to the program. Your income will not affect your ability to file.

[josan333]

I have turbo tax premier and same problem.   Can't delete either.  I do know the info is from Vanguard's 1099-div.  Hope they resolve this issue

[MayaD]

Revisit the 1099 DIV section and clear the entry in box 5 then try to delete form 8995-A.

[ftlech]

It's Feb 20 and I still cannot file.  Is this something that will automatically update my return when the release comes out?  Will I be prompted to enter something?  

[PB11]

I tried to use TT today, and even with QBI deductions, TT proceeded till the payment page. So looks like the issue is resolved now.