(California) Form 3853 BUG. I am eligible to have short gap coverage. I did not have health insurance coverage for 3 consecutive months.

[dippinb]

When I unselect August/September/October, I get penalized.

When I unselect ANY OTHER consecutive 3 months, the penalty is waived.

PLEASE ADVISE.

[LenaH]

It would be helpful to have a TurboTax ".tax2021" file that is experiencing this issue. You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions for TurboTax Download:

1. On your menu bar at the very top, click "Online"
2. Select "Send Tax File to Agent"
3. Click "Send"
4. The pop-up will have a token number
5. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information. 

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

[dippinb]

1001068

The copy I am sending includes me overriding Form 3835 and changing the code for October 2021 to "C."  I indicated that I did not have insurance in August and September 2021 before going into the forms.

Thank you so much for your prompt response.

[dippinb]

Any updates?

[md2395886]

The exact bug exists for TurboTax 2023 Deluxe. And unfortunately, I found no way to override it via TurboTax (and plan to fix it manually on print outs).

[md2395886]

By "no way to override" I meant I can override C to Z, but not Z to C.

[MonikaK1]

Please clarify. For how many months did you not have health insurance? Were the months consecutive?

From the Franchise Tax Board's explanation of the California health care mandate:

California residents who do not have coverage for themselves and their dependents for each month in 2023, and who do not meet an exemption, will pay a penalty of $900 per adult or more and $450 per dependent child, or 2.5% of their or gross income over the filing threshold for their filing status, whichever is higher. The penalty for a married couple without coverage can be $1,800 or more, and the penalty for a family of four with two dependent children could be $2,700 or more.

A short gap coverage exemption will apply for taxpayers who did not have coverage for three consecutive months or less. (Note to meet the federal short gap coverage exemption the gap coverage must be less than three consecutive months.)

[md2395886]

Hi Monika, if one has a total 3 months of insurance gap in the entire year 2023. If he entered them as Aug, Sept., and Oct, the penalty shows up in TurboTax where the California Form 3853 shows the 3 months marked with an 'X'. But if he were to enter the 3 months as a different 3 consecutive months, e.g., Jul, Aug, Sep, the penalty disappears and the Form 3853 shows the 3 months marked with a 'C' in them (exempted from penalty). This is clearly a TurboTax bug that existed at least since from two years ago.

[MonikaK1]

Okay, so the penalty is applied only if you select August, September, and October as the months of no coverage?

If your tax file still shows the entries that caused this issue, and you would like for us to troubleshoot the file, you can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions for TurboTax Desktop users:

1. From the black bar at the top of your screen, select Online
2. Click Send Tax File to Agent
3. Click Send on the message that pops up
4. TurboTax will create a "sanitized" copy of your return information with no personal info
5. Post the 7-digit token number here in this thread

We will then be able to review your file to see what you are seeing, and we can determine what is going on in your return and provide you with a suggested resolution here in this thread.

[md2395886]

Yes, that's what happens.

[kaichieh7882]

Just experienced this issue when filing my 2023 tax return today. By default, it checked all months of the year. But when I navigated to the next page then back, everything except January was unchecked. Obviously there is some bug.

My suggestion would be to try navigating to the pages following the months selection then back. Or to uncheck and recheck the checkboxes of all the months you had insurance to work around this bug.

-- speaking from my experience as a software engineer