C-Corp Form 4626 Alternative Minimum Tax - Corporations. Received a letter from IRS, did not include Form 4626. I cannot find the form in TurboTax. What am I missing?

[Faith C · Accepted solution]

Thank you so much for expressing your concerns. Form 4626 is required to file with a corporation tax return unless a filing exclusion applies.  Based on IRS Form 4626 instruction, taxpapers can choose to apply the safe harbor method (simplified method) if qualifies. IRS clarifies rules for new corporate alternative minimum tax generally applies to large corporations with average annual financial statement income exceeding $1 billion. 

If taxpayer qualified for safe harbor method (most corporation may qualify), they can click the "yes" box on Form 1120 Sch K Line 29c to avoid filing Form 4626. 

If you have received an IRS letter regarding this issue, you may file amendment with updated Form 1120 with line 29c box checked yes. Or, you may also respond to IRS letter with Form 4626

We appreciate for your business and continuous support. Please feel free to contact us if you have any further questions. 

[pairahoos]

Unfortunately Turbo Tax automatically populates NO on box 29C of Schedule K.   In the business interview section the user is not asked if the company qualifies as a safe harbor.   There are 2 questions related to Alternative Minimum tax -- but this 3rd crucial question is not asked and the box is automatically populated with the answer NO.    So that is an error in the software.  The first question asks if it is an applicable corporation and the explian this link says "If the average adjusted financial statement income for the three prior years is $1 billion (or $100 million if a foreign-parent multinational group), the corporation is an applicable corporation"

If you answer NO then the next question asks if the corporation is currently applicable because of a prior year. 

However if you answer YES to question the followup question changes to "Does the corporation meet the requirements of safe harbor".

On the face of form 1120 section K questions 29a to c the if then logic is documented and Turbo tax has it WRONG in the PROGRAM.   A NO to 29A is presenting 29B instead of 29C - and it populates row 29C even though the question was never asked.   A  YES to 29A is presenting 29C it is supposed to show 29B and then based on that answer show 29C.   And a NO to 29A is presenting 29B instead of 29C

The PROGRAM LOGIC IS WRONG FOR SCHEDULE K line 29A and NEEDS TO BE FIXED.

Tax form:

29 Corporate Alternative Minimum Tax:
a Was the corporation an applicable corporation under section 59(k)(1) in any prior tax year? . . . . . . . . . . .
If “Yes,” go to question 29b. If “No,” skip to question 29c.
b Is the corporation an applicable corporation under section 59(k)(1) in the current tax year because the corporation was an applicable corporation in the prior tax year? . . . . . . . . . . . . . . . . . . . . . . . . .
If “Yes,” complete and attach Form 4626. If “No,” continue to question 29c.
c Does the corporation meet the requirements of the safe harbor method as provided under section 59(k)(3)(A) for the current tax
year? See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If “No,” complete and attach Form 4626. If “Yes,” the corporation is not required to file Form 4626

[pairahoos]

Where is this posted on the sales page that you see when you are comparing products?

[pairahoos]

There is an error in Turbo Taxes Question and Answer programming and it populates the boxes wrong.  Kind of defeats the point of using turbo tax if you have to review each line against the tax code and instruction forms.

[sl244977]

Thank you so much for this article, very helpful!

[CARESBC]

If in fact the replies here represent Intuit Turbo Tax, being rude to users isn't acceptable.

[algrove]

Why let us file an improper 1120 return and then now tell us how to amend our return. For a very small business this is lousy support.