Endless loop in New York residency

[sswariaootghg]

I am using TurboTax Deluxe for Windows. Since, for some unknown reason, TurboTax doesn't automatically select the best filing option for me (I am usually better off filing Married Filing Separately because it allows my wife to claim Empire Child Tax Credits that we would not qualify for if we file Married Filing Jointly due to income thresholds), every year I have to manually run the different scenarios multiple times to see which one works better. I start with a MFJ return, then have to save it and go back and change it to MFS and delete all of my wife's information. This, in itself, is a major flaw of TurboTax that cost me quite a bit over the years before I discovered it, but I've gotten used to all the extra work that shouldn't be necessary.

However, after I select MFS and remove my wife's W-2, etc., when I go to the New York return, it asks me New York City Residency Information for my spouse, then Yonkers Residency Information for my spouse, then returns to New York City Residency Information for my spouse, then Yonkers Residency Information for my spouse, then New York City Residency Information for my spouse...in an endless loop.

This is not new this year. This happens every year. I don't remember how I escaped the loop before. As I remember, I think I deleted the New York State Information Worksheet, which then automatically reappeared and allowed me to continue in the Step-by-Step. When I try to delete it now, it says, "This form cannot be deleted." So I am stuck in an endless loop with no way to continue.

How am I supposed to get out of this loop? Why has this not been fixed after at least five years? Why do I even have to do all this, when TurboTax should be giving me real analysis and telling me the correct filing status?

[Cass0317]

Please see the TurboTax FAQ below to help with this NY loop you are experiencing:

There is an update available for your version of TurboTax" loop when e-filing (Windows)

[sswariaootghg]

Your response did not answer my question. You gave a generic response that did not fit the situation. Again, this is not a loop saying that there is an update available. The loop is after changing filing status from Married Filing Jointly to Married Filing Separately. It continually asks NYC and Yonkers residency for my spouse. Please don't give another canned answer without actually reading the question and addressing it.

[CarissaM]

It would be best to contact us by phone so we can look into this further. We only have limited abilities here in this public forum. Please follow the directions here to contact us by phone. 

[kdane5184]

Hey - Were you able to get this sorted out? I'm stuck in the same loop because I'm a non-resident married filing separately for NY income and it keeps asking about my wife's residency in the endless loop.

[sswariaootghg]

It's been a long time, but as I recall, I think my workaround was to go into forms and delete the NY IT-201 form. The form automatically regenerates.

[MonikaK1]

New York is one of the states that allows separate filing even when the Federal return is filed jointly. I have not been advised of any problem with this process for New York. If deleting the problem form NY-IT-201 didn't resolve the issue, please provide more details.

To prepare a joint Federal return and separate State returns in TurboTax:

You can use TurboTax Online to file separate state returns, but we recommend you use the TurboTax Desktop software version to do this because you'll only need to pay for one TurboTax product (you can file up to five returns).

Tip: If you already started your return in TurboTax Online, we recommend that you transfer your tax file to the Desktop version. You'll save time by entering less information.

Here's a brief overview of the procedure (see the sections below for detailed steps):

1. Prepare one married filing jointly (MFJ) return to file with the IRS.
2. Prepare a mock married filing separate (MFS) return for each taxpayer. This is for your records only and will be used to generate separate state returns for each person. The mock federal returns are not filed.
3. Then, for the first taxpayer, label and use the first mock MFS federal return to prepare their state MFS return. Use only their income and their half of the deductions from the MFJ federal return.
   • This ensures that TurboTax only transfers the first taxpayer's income to their married filing separate state return.
4. File this MFS state return, not the mock federal return that it pulls the information from.
5. For the second taxpayer (spouse), label and use the second "mock" MFS federal return to prepare their state MFS return. Again, use only their income and their half of the deductions from the MFJ federal return.
6. File the second MFS state return, not the second mock federal return that it pulls the information from.

Be sure to name each TurboTax federal return so you know the MFJ federal return to file, and which mock MFS federal and state return is for which person.

See this TurboTax help article for more information about filing a joint Federal return and separate State returns. 

@kdane5184