F8960-019-04 - If Form 8960, 'NetRentalIncomeOrLossAmt' has a non-zero value, then it must be equal to Schedule 1 (Form 1040), Rejected E-file any help?

[taxquestion5]

Our efile was rejected due to this. Believe it has to do with our 1099-NEC. Any way around this?

[RobertB4444]

Please clarify - do you have rental income or loss for this tax year?

@taxquestion5 

[taxquestion5]

We have neither. We have a 1099-NEC that for some reason is being reported on form 8960. Turbo tax is doing that. When we go to file federal rejects the filing. As far as we’ve researched it’s a known issue in the IRS website but we don’t really know why it’s reporting that 

[RobertB4444]

Sounds like you may have reported your 1099-NEC in the wrong place.  A 1099-NEC is issued to contract workers and small businesses.  So you'll need to enter the 1099-NEC as income from your small business along with any related expenses and then you should be able to file the return.

@taxquestion5 

[taxquestion5]

Thanks so much for the response! Don’t know how that could be possible as we entered into the 1099-nec section in turbo tax as such. This is the message we get for the rejection reason from TurboTax. :

Form 8960, 'NetRentalincomeOrLossAmt' has a non-zero value, then it must be equal to Sched 1 (Form 1040), 'RentalRealEstatelncomeLossAmt unless all of the following conditions are true: 1

Filing status of the return is Married filing jointly or Qualifying widow(er) and 2) Form 8960, checkboxes 'Section6013glnd' and 'Section6013hInd' are not checked and 3) Form 8960,

'Filing ThresholdAmt' equals 125000.

This return cannot be electronically filed due to a processing error on Form 8960, Net Investment Income Tax.

There is currently no estimated date for when this will be resolved. You have two options:

1. You may wait a few weeks and attempt to resubmit this return, or
2. You may print and file the return by mail.

This message will be updated when a resolution date is identified.  

Does this make any sense?

[RixReeves]

I could be wrong, but it sounds like you've run into the same issue that a LOT of the rest of us are up against right now.

https://ttlc.intuit.com/community/taxes/discussion/federal-return-rejection-reject-code-f8960-019-04...

[taxquestion5]

Yep…just read the thread. Looks

like it was just pushed to mid March now? Does tt have a remedy for this or able to remove this form like H&r is?

[BligBlueLaser]

@RobertB4444 

Form 8960 is not only for "rental income or loss" and 1099-NEC income being included on Line 4a of Form 8960 is not likely the result of having, "reported your 1099-NEC in the wrong place," as you suggest.

It's more likely that your software, TurboTax, is doing exactly what it is supposed to do according to the IRS.

You can get up to speed by reading the 2022 instructions for Form 8960: as of 2022, Schedule C amounts are to be added on Line 4a (and the non-passive portion of that deducted on Line 4b) for all taxpayers who fit the criteria under "Who Must File" on page 1 of that PDF, and the specific instructions for Lines 4a/b can be found of page 6.

[Navyretired02]

Here is what I got last night. (2/16/2023) There doesn't seem to be anyway to check if the fix has actually been made though.

Form 8960, 'NetRentalincomeOrLossAmt' has a non-zero value, then it must be equal to Sched 1 (Form 1040), 'RentalRealEstatelncomeLossAmt unless all of the following conditions are true: 1

Filing status of the return is Married filing jointly or Qualifying widow(er) and 2) Form 8960, checkboxes 'Section6013glnd' and 'Section6013hInd' are not checked and 3) Form 8960,

'Filing ThresholdAmt' equals 125000.

This return cannot be electronically filed due to a processing error on Form 8960, Net Investment Income Tax.

This issue will be resolved on February 19, 2023. On or after this resolution date you may resubmit this return for electronic filing.

[sdbonez]

Well, I can confirm it's still happening today as of an hour ago - figures I tried to get ahead for once on my taxes and apparently pulled the trigger (at least) 1 day too early.

They locked the main thread - lovely.

[Hermitcrabaz]

My return was accepted on 2/19 after previous rejection.  I had the same issues as everyone here.  I have a Schedule C basically business contractor profit that was not passive income.  That amount was placed by Turbo tax on line 4a of 8960.  (even though I have no real estate profits).  Then on 4b is the exact same amount but a negative value canceling it out and it shows a "0" on 4c.  There is also a negative amount on line 5a "net loss of disposition of property" but I had no property, the amount listed is my total capital gains loss from stocks this year.  Line 5 of schedule 1 is blank.  Line 17 on 8960 does have a positive amount which is 3.8% of my dividends and interest minus my capital gains losses which is the correct amount.  That was auto placed correctly on my 1040.  On my 8960 works form it listed the total amount of business income(profit) on the line "adjustment for business or trade income not subject to net investment tax".   I did notice that a schedule E was autogenerated at some point, so I just deleted that form.   What is interesting is that turbo tax showed no errors, and I filed, and it was rejected.  On the rejection explanation it said try again on 2/19.  So basically, I did not have to change anything other than deleted schedule E.  This time it was just accepted.  Everything looks the same as it did when it was rejected.  So the IRS must have changed something.  But wanted to update people that it did go through today for me.  I still think it is unusual the way lines 4a and 4b are worded that a small self business income is listed there.  Other advice to delete form 8960 is wrong.  if you make over 250,000 married filing jointly and have investment or dividend income you have to do this form.  I am not a tax professional at all.  Just a TurboTax user.  But it went through today for me with pretty much changing nothing.

[Navyretired02]

I just had my Federal accepted today. It was submitted around 11:30AM Central time on 2/20/2023. Appears they have fixed the problem with Form 8960.

[Navyretired02]

Me too. See post below. Good post Hermitcrabaz!

[crshera]

I recently experienced having my 2022 federal tax return rejected for this exact problem, but today, February 20,2023, I simply e-filed again without changing anything and my return was accepted less than 30 minutes later.  I expect that I will soon get confirmation that my e-filed 2022 state return has been accepted,