I just filed my daughter's Federal and State (Colorado) tax returns but they were rejected with the error, "Reject Code 5695_Joint_Occupancy". There is a check box, line 32a, in form 5695 which says, "If the special rule for joint occupants applies, check here and attach a statement". This box is checked, no matter what and I think it is the reason for the problem. The property is jointly owned (two people), but all the energy improvements as it relates to this credit were paid by my daughter. If I understand the IRS instructions of form 5695, I think Line 32a with the checkbox, has to do with lines 7a through 7c of PARTI of the form which is the "Residential Clean Energy Credit". She did not have any credits on that section. The only credits she had was in PART II, the "Energy Efficient Home Improvement Credit". This is why I think the TurboTax program has a bug that needs to be fixed. Can someone please tell me if my assessment is wrong and if so then how do I go about fixing this error so I can e-file the returns?
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There is information that returns that have been rejected with the reject code 5695_Joint_Occupancy will not be able to be electronically filed until after mid-March.
You may wait until then to electronically file your return or choose to file it by mail. Another option would be to remove the energy credit, electronically file the returns, and later amend to add the energy credit back for the additional refund.
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