IRS form 8960 Net Investment Income Tax can apply to modified adjust gross incomes that exceed a threshold amount:
and apply to a variety of incomes detailed under Net investment income under the Instructions for Form 8960.
Have you reviewed this information to see whether you qualify to for this form? What does the message from TurboTax state? Please clarify.
I received a similar error. Below are the full details. Previous posts I searched (2020 chat) said I had to use the CD/downloaded version. I am using the online version. Please advise.
Form 8960 is under active investigation for receiving Error code: F8960-019-04. If this is what you are seeing, I recommend patience since mailing in your return would take months. They just finished the 2020 returns. You are filing 2022.
If not that code, address the reasons you listed. Your code statement above looks like you are MFS from an alien, and have NIIT due to your income.
If that is not your code and you would like to respond with more information for help, we would be glad to assist.
Yes, that is the error code I am receiving. So I should go ahead and wait for a couple weeks and refile? I wanted to make sure there wasn't anything on my end that I was doing incorrectly. Sounds like it out of my control, and I just need to wait?
If I am still having the issue after 2-4 weeks, is there any other option besides mailing it?
Thanks again for the help and quick response.
In late February to mid-March, it will be corrected by the IRS, this is a known issue to them rejecting returns, see list of IRS KNOWN ISSUES. Please wait for IRS to update, this is across the board with the IRS.
@ptplayer
I received the same error; however, I do need to use form 8960 and it appears that TurboTax software is pulling the wrong amount into Form 8960 Line 4a. So is this something Intuit intends to fix in the application?
There's no known issue with line 4a of Form 8960.
However, it's important to realize that line 4 is populated with information from several sources.
According to Line 4a—Income From Passive Trades/Businesses, Rental Real Estate, Royalties, Partnerships, S Corporations, and Trusts in the Instructions for Form 8960:
Enter the following amount from your properly completed return.
Please see the instructions linked above for more details.
Thanks for the added info. I just compared the Form 8960 instructions for 2022 vs 2021 and they changed which seems strange as it is in effect treating my Schedule C activity as "passive" income which is not accurate. Anyway, I saw the change in treatment from 2021 and thought it may be something with the software, so appreciate you calling out the instructions as I should have looked there first. Guess I get to wait on the IRS to fix the issue 😕 thanks for your help
I am in the same situation and it will NOT let me delete the form. So frustrating.
If you are being rejected for the 8960 and you do not need to include it then you need to go back through the interview and change your answers to the questions involving the 1095-A.
The IRS has a known error where they are rejecting returns for this when the form does not need to be included. If you're being effected by that then you should be patient. They are working on it.
😔Same situation. First year to exceed $250 and now there's this form that mistakenly inserts 'active income' in "Rental real estate, royalties, partnerships, S Corporations, trusts, etc". Argh. I really hope they fix whatever this is and get the ball rolling.
Since the last update, the TT desktop app displays a message related to this error which says we’ll be able to e-file on or after Feb. 19 (tomorrow).
Do you know if that is still true or not? Your reply says “they are working on it” which doesn’t sound like “tomorrow.”
I just successfully filed my federal return- It appears the 8960xx error has been fixed!
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.
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.
See my post below. It went through for me on 2/19 with no changes made.
HI,
My return rejected 2 times early February. Today, the 19th, I tried filing again after reading others were accepted and YES, the return was accepted by TT and then later by the IRS.
@RobertB4444 I have gone back into the easy step and you are correct that TurboTax is autofilling the question on 1095a as "Yes" but the true answer is "No". I have corrected this several times and saved several times but it is still reverrting back to a "yes" answer on having a 1095a. I do not have insurance through the ACA marketplace as I have a 1095B through my full time employer. Is this a turbotax issue or how do I correct this?? I have already been rejected by the IRS 3x and I don't want to risk another rejection. I think after 5 rejections they make you file by mail.... UGH>>>> Should I file using another type of software??? I've already paid for both TT Online and Desktop because that's what the support told me to do when this first started back on 1/23... I am at my wits end. Please HELP! You're the first one to catch this issue for me, so I'm really appreciative. 🙂
The system has been updated, and this issue should be resolved. Please try to continue filing.
This is an IRS issue - that is tracked on IRS website solutions page \
SEE NEW INFO UPDATED AS OF 2/15 :
I have been sitting on my efile for about month waiting for this to be fixed. Looks like IRS making progress .
It is now corrected - I successfully filed federal on 2/20. Now to fix the problems with Indiana state!!! UGH - TT is really irritating me this year.
There is something odd with 8960 in other ways. I had (non-passive) schedule C income which was reported by TurboTax on line 4a (correctly) and then canceled out by an equivalent negative value in line 4b, for a total of 0 on 4c (also correct, since non-passive Schedule C income is not subject to net investment tax). I recently got a BIGGER than expected refund from the IRS, so I checked the tax transcript. the IRS auto-corrected the return by REDUCING my income subject to the net investment tax by the amount that was supposed to just cancel out.
To make up some numbers: Suppose I had $10K in net interest income, line 4a income of $1K, and line 4b income of -$1K (for reasons described above). Line 8 should be $10K. But the IRS essentially made it $9K. How can this be? Am I missing something. I looked over past returns, and nothing like this has ever happened.
Assuming that you have checked your return and that it does not reflect this one thousand dollar change then you have been the victim of the fabled IRS error in your favor. It certainly seems that way, anyway. TurboTax would have no ability to effect a change on your return AFTER it has been received by the IRS.
Tuck the money away in your memory hole so that if the IRS ever discovers the error and sends you a letter you are prepared to return the extra refund that you received.