File rejected due to form 8960 error, but I don't have a 8960 form as part of my filing. Turbotax says cannot fix, what do I do to correct this?

[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.

[Hermitcrabaz]

Me too.

[Hermitcrabaz]

See my post below.  It went through for me on 2/19 with no changes made.  

[REFFY]

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.

[Navymanswife]

@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. 🙂 

[SForrestLO]

The system has been updated, and this issue should be resolved. Please try to continue filing.

[christyvaw4412]

This is an IRS issue - that is tracked on IRS website solutions page \

SEE NEW INFO UPDATED AS OF 2/15 : 

What needs to be done:

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.

I have been sitting on my efile for about month waiting for this to be fixed. Looks like IRS making progress . 

[Navymanswife]

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.

[DavidinNY]

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.

[RobertB4444]

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.  

@DavidinNY