Ma form SC

[WTax1]

MA form SC has a bug determining available credit and credit used this year for septic systems installed 2020-2022. I have $3000 credit remaining last year but for septic installed in those years MA only allows $1500 deduction per year until all the credit it used. Turbo tax continues to take the full $3000 credit this year.

I can make the correct credit this year on Form 1 by manually claiming I have only $1500 remaining credit to use but that leaves form SC incorrect and I will loose remaining $1500 of the $3000 for next year. 

I also tried to change the credit work sheet manually to make the correct credit appear on MA form 1 but It also leaves form SC incorrect. Form SC is important because it seems that is how MA keeps track of used/unused septic credit.

Help....

[Vanessa A]

Is there a spot that asks for the date that you installed the septic system? 

 You are correct, the credit for those who installed the system prior to 2023 are only able to take the $1,500 credit.  After that the limit increased to $4,000. 

[WTax1]

Yes I had entered 11/11/2022.

I am guessing since 2023 and beyond allow $4000 per year. When the product was updated to include new rules for 2024 and beyond the  rules for years prior to 2023 are now being dealt with incorrectly and assume $4000 as well.

For what it is worth I spent quite a bit of time on the phone with a turbotax support person and they could not find a workaround. I have also contacted MA dept of revenue to see what they will accept as a work around but have not heard back yet.

[Vanessa A]

I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:

TurboTax Online:

1. Sign into your online account.
2. Locate the Tax Tools on the left-hand side of the screen.
3. A drop-down will appear. Select Tools
4. On the pop-up screen, click on “Share my file with agent.”
5. This will generate a message that a diagnostic file gets sanitized and transmitted to us.
6. Please provide the Token Number that was generated in the response.

TurboTax Desktop/Download Versions:

1. Open your return.
2. Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent” *
3. This will generate a message that a diagnostic copy will be created.  Click on OK and the tax file will be sanitized and transmitted to us.
4. Please provide the Token Number (including the dash) that was generated in the response.

*(If using a MAC, go to the menu at the top of the screen, select Help, then, “Send Tax File to Agent”)

[WTax1]

Hi, I did the "send form to agent" a few hours ago. Could you please confirm you received it. I did not see a place to send the token.  Thanks

[AnnetteB6]

Once you have the token number, you should post the number in a response in this community.  Otherwise, we cannot retrieve the tax file from the system.  If you can take a screenshot of the token number that is helpful to keep it from being redacted by the system.  

@WTax1 

[WTax1]

the token number is:

144638789-77157601

I send the file yesterday for debug.

Please confirm you have the file and can read it. Let me know if you need anything else. Thanks for looking into this MA form Sc issue. I really appreciate it. Look forward to hearing from you.

[Vanessa A]

Yes.  After looking at your entries, the problem is that you entered the leftover credit in 2023 instead of 2022.  Since the rules for 2023 allow the entire amount to be used, entering it in 2023, gives you the extra credit.  When you enter the unused amount as being from 2022 with $0 in 2023 it decreases your credit to $1,500. 

[WTax1]

Hi, that solution does not solve the problem. It solves half the issue, it gives the $1500 credit for 2024 but incorrectly makes me loose the remaining credit I would have in 2025.

    I have $3000 credit remaining to use in 2024. That would result in $1500 used in 2024 and leave $1500 remaining to be used in 2025. The suggested solution does not leave me any credit for next year. For what it is worth TurboTax did  "available" and "used this year" and "remaining" analysis correctly in 2022 and 2023. For instance the 2023 Form SC produced by turbo tax did show $4500 available, $1500 used, $3000 remaining for use 2024

    Just a reminder since I started in 2022, I can only take $1500 per year so taking the $3000 available all at once in 2024 as the software is doing now is not allowable. 

see below:

tax year 2022 $6000 credit available of which $1500 is used leaving $4500 to be used in tax year 2023

tax year 2023 $4500 credit available of which $1500 is used leaving $3000 to be used in tax year 2024

tax year 2024 $3000 credit available of which $1500 is used leaving $1500 to be used in tax year 2025

tax year 2025 $1500 credit available all of which will be used and the full septic credit will have been taken at that point.

    Please help, I have found no solution that gives both the correct "Used this year " and "Remaining available for next year" values in Form SC . 

Thanks, look forward to hearing from you.

[Vanessa A]

You do not lose the remaining credit.  If you look at Schedule SC and the worksheet, you will see on Part 4, the Unused Septic Credit Carryover, that if you enter $3,000 in 2022, you will have $1,500 in column B as being used this year and then column C will have $1,500 as the unused credit available.  This appear on the line for 2022 and then 2024, so it is being used and carried over properly. 

If you change that number to $4,500 you will have $1,500 in column b for the portion used this year and $3,000 in column C for the unused credit available. Column C for 2024 is the amount you will carryover to 2025. (I know your credit is $3,000, but just showing how the numbers change and work)

  When you do your 2025 taxes, you would enter $1,500 in 2022 as that would be the amount you had left over although, TurboTax should import it in that column when you transfer your prior year return. 

Basically, you need to enter the amount in 2022 so it is properly used and carried over by 2022 rules.  If you enter it in 2023, it will not be treated properly when you enter it as a 2022 credit.  But also, when you look at the worksheet, the number is showing as coming from the 2023 Schedule C as a unused credit.  For 2025, you will see column a say 2024 Schedule SC line 14 column c. 



 

[WTax1]

    Really appreciate your work on this. Almost there, unfortunately  the SC is good but it still shows the full $3000 taken on Form CMS which results in $3000 on the credits line on Form 1. It does seem to allow me to manually change Form CMS in the "forms" mode resulting in a correct form  1 which I have now done. But that is only a work around, turbo tax does not do the analysis correctly and offers no alert manual intervention is necessary.

   If you check it out you may want to escalate the technical issue. 

  At any rate I do appreciate you sticking with me to get me to this point.

[Vanessa A]

The solution to the CMS form is to delete the form and let it regenerate.  You do not need to manually change anything.  The $3,000 that was originally being deducted is stuck there.  Prior to deleting the form it showed $3,000 as taken this year.  After deleting the form, it immediately popped back up and showed $1,500 taken this year with a $3,000 credit available. 

It also changed the amount on line 31 of Form 1 to $1,500. 

[WTax1]

   THANK YOU !  Impressive work and follow through ! Intuit/Turbotax is lucky to have you on their team !