Bad advice from TurboTax regarding my dependents tax return.

[JLPATL]

I have two teenagers with after school jobs. One is 17, the other is 15. I helped them do their taxes using TurboTax in January but hadn't done my own taxes until recently as I was waiting for more tax forms. When I did my kids' taxes we clearly checked under the Standard Deduction section that "Someone can claim me as a dependent." TT recommended that both my kids take the standard deduction of $12,000 for a filer claiming "single" status. However, as I later found out (as explained in this long winded vent of mine) if someone can be claimed as a dependent on someone else's tax return, then they cannot take the standard deduction. Now, after the fact, I see that clearly stated on line 8 of Form 1040.  Jump forward to this week when I finally finish my taxes and my e-file attempt was rejected by the IRS. And because my federal return was rejected, my state form could not be e-filed. I received error "IND-517" relating to dependents. I didn't understand the issue so I called TT customer service. I am basically told by the woman on the other end that the issue has something to do with my dependents and that is all the information they can give me. The next day I call the IRS. The IRS asks if my dependents checked that they can be claimed as dependents. "Yes they did." She looks at one my kid's information as the other kid's return hasn't been processed yet, and tells me the issue with the standard deduction.  (Again, as clearly stated on line 8 of the Form 1040, but somehow not picked up by TT.) The solution for me is to either complete a Form 1040X to amend my kids's returns so that I can then efile. Or mail in my return.  The 1040X is a much more complicated form than what was originally completed for my kids and I have to first wait for my other kid's return to be processed. I am preparing to mail my forms in now.  (There's more if you want to keep reading.)

I called TT about this and ended up talking to a very nice lady. I told her I wanted a return of my $19.99 paid for the privilege of filing my state taxes electronically through TT as the efile was rejected due to the advise provided by TT. I told her the whole story above. She has to communicate this to another group. She relays to me a response from the group within TT with whom she is communicating (this lady was very nice and helpful so I don't want to shoot the messenger) that the reason I was given for the rejection of efile attempt was wrong. She relayed that the kids' use of the standard deduction shouldn't matter.  REALLY? I told the woman I was speaking with that TT doesn't have any credibility on this issue because it clearly states on the line 8 of the 1040 that they couldn't use the standard deduction owing to the fact that they can be claimed as a dependent elsewhere.  Furthermore, TT wasn't able to tell me what the issue was with the dependents on my tax return when I first called. Perhaps the customer service person I spoke with the other day didn't know, or perhaps she didn't care to figure it out. But the facts are that the IRS rejected my efile because of how my dependents filed their taxes. The IRS and they explained the problem to me, in great detail, and provided the solutions to fix the matter. So for that TurboTax representative that tried to tell me the rationale for my rejected efile attempt was wrong has no credibility. The IRS made the decision to reject my efile attempt and the IRS told me why they rejected it and how to fix it. I think the IRS is correct on this one.

[Wyldaisy]

TT is still doing it this year.  I clearly marked on my sons return that he can be claimed by someone else and WILL BE claimed by someone else.  It gave him the $12,000 deduction.

Luckily I am doing my taxes at the same time and CAUGHT THIS - but I still have to figure out how to fix it in his return.  HUNT and PECK!  I should not have to do this.

[AJ]

     I'm sorry to hear your story here.  I know it must be frustrating.  I do not work for TurboTax.  I only look at this support site to further my education and to offer assistance where I can.  While I cannot solve the whole problem, I hope to clarify some information that is not correct here. 

     First the problem, as stated, concerns the error code IND-517.  This code does apply when there is a duplicate filing under the same Social Security number. 

     However, your children should qualify to get a standard deduction on Form 1040 Line 8 whether or not they are claimed as dependents. The process to calculate the standard deduction for someone who can be claimed as a dependent can be found in IRS Pub 501 located on page 25 in Table 8.  You can manually check the calculation on your children's returns using the simple process in the table.  The standard deductions for your children can be between $1,050 and $12,000 depending upon their other income.  So if your child earned more than $11,650, then a $12,000 deduction would be the correct answer.

     https://www.irs.gov/pub/irs-pdf/p501.pdf

Now back to debugging the error code for a double submission under the same SSN, which is the real problem.  Please look at the Front page of Form 1040 of your children's returns.  Look immediately below the name of the taxpayer on the form where is says, "Your standard deduction:"  There should be a check in the box that says, "Someone can claim you as a dependent".  If that box is not checked, then that is likely the problem.  Therefore, if that someone-can-claim-you-as-a-dependent box is not checked, then the normal action should be to amend that child's return. (I cannot judge whether it was not checked due to a software error or due to something else.) 

     However, if that box is checked, as it should be, then I recommend that you also look for additional reasons to explain why a duplicate return has been filed using the child's SSN.  Yes, it might be a software error (either TT or IRS software) as you suspect.  But perhaps someone else is filing a return using your child's SSN.  The reject might also be due to a case of identity theft.

     Good luck in figuring this one out.  Again, I do not work for TurboTax. I am a volunteer on this forum.

[AJ]

Wyldaisy.  Please see the AJ post to this tread.   I doubt that TurboTax is wrong on this.  Hopefully, you have nothing to fix.    A $12,000 standard deduction can be correct when other income goes over $11,650.