Forced to Upgrade to TurboTax Deluxe

[bkschn8]

I am a first year college student and a first time filer for 2021. I filled in the information from my 1098-T form and was told that I did not qualify for the Lifetime Learning Credit or the American Opportunity Credit. However, when I reached the File page in order to finish filing my taxes, I was met with a message that says I need to upgrade to TurboTax Deluxe because I have a Lifetime Learning Credit. The only credit that I qualified for was Recovery Rebate Credit. What should I do?

[MarilynG1 · Accepted solution]

Look at your 1098-T.   Is Box 5 a larger amount than Box 1?  If so, you don't qualify for the Education Credits.  The credits are to help you with 'out of pocket' education expenses.

Look at your Form 1040, Line 20.  This is where the Lifetime Learning Credit would show (if you qualified).

In the left-side menu, click on Tax Tools > Tools > View Tax Summary > Preview 1040. 

If you don't see a credit there, you could delete the 1098-T from your return (just keep it for your records) and stay in your current version. 

If you do see a credit, you may want to upgrade. 

Click this link for steps on How to View and Delete Forms in TurboTax Online.

[perrtree]

I'm having the same problem.  I finished my son's taxes and it says I need to upgrade to deluxe because he has a Foreign tax credit.  I double checked and cycled through that section (twice), he's not eligible for that credit.  I also looked at the delete forms page and I do not see that form listed.  But I can't get past this page to submit his taxes.  How do I refresh and get Turbotax online to realize that he should be eligible for the free version?  

[mesquitebean]

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@ perrtree wrote:

I'm having the same problem.  I finished my son's taxes and it says I need to upgrade to deluxe because he has a Foreign tax credit.  I double checked and cycled through that section (twice), he's not eligible for that credit.  I also looked at the delete forms page and I do not see that form listed.  But I can't get past this page to submit his taxes.  How do I refresh and get Turbotax online to realize that he should be eligible for the free version?  

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Does he have a 1099-DIV that has an amount in Box 7 for "Foreign tax paid?"  Or did he receive any other form that has "Foreign tax paid?"    If so, then the program may be trying to add Schedule 3 and giving the credit there. 

[perrtree]

Yes, he does have $38.50 in foreign tax paid on his 1099-DIV but I do not see a Schedule 3 in the list of forms either.  

[RogerD1]

You may need to go to the Deductions and Credits section, and look for Foreign Taxes in the Estimates and Other Taxes Paid section.  If it says Needs review, click Start or Update on Foreign Taxes.

On the Tell Us About Your Foreign Taxes screen, you should click the two top boxes if they apply to your son's case.

You will want to take the Credit for those taxes rather than a Deduction.  You will then get to a screen stating that the Foreign tax credit is $39.  This will carry over to Schedule 3, line 1.  The total of the tax credits on Schedule 3 then carry over to Form 1040, line 20.

[perrtree]

I've gone through this section several times...  I get a message saying "Looks like the Foreign Tax Credit doesn't apply this year" which is why I am so frustrated that the filing page tells me that I need to upgrade because of this credit!  

1) TurboTax says my son is not eligible for this credit.

2) Later it says that I need to upgrade due to the Foreign Tax Credit (form 1116).

3) There's no form 1116 (or Schedule 3) in the list of forms for this return. 

There's a glitch in the TurboTax system preventing free filing. 

[MarilynG1]

If he wants the free filing, go back to the 1099-DIV entry and delete the amount of Foreign Tax you entered.  The IRS doesn't care that he doesn't claim this credit.  If you're using TurboTax Online, after deleting the Foreign Tax, close the program, clear your Cache and Cookies, and re-open TurboTax to continue to efiling.

@perrtree 

[perrtree]

Thank you!  That did it!