NY is a credit reduction state for Schedule H purposes. Accordingly, I am supposed to fill out Section B on Schedule H. The turbo tax tool erroneously imports a value in line 20 that's greater than $7,000, which it imported from Line 17(b). Per Schedule H instructions from IRS, line 20 is capped at $7,000. How do I input the max amount of $7,000 on line 20 instead of the $12,000 value that it imported from line 17(b)?
Line 20 is capped at $7,000 per worker. It is possible that you are reporting wages for more that one worker, so the amount in box 20 could be more that $7,000, so you may not need to change it.
I don't think that's it because Schedule H does not care how many employees you have. It only cares about the total wages paid for all employees. There is no segregation for wages paid for each employee. My line 20 is NOT capped at $7,000. It is using $12,000, which is the NY State Unemployment Insurance Wage Base amount. The $12,000 value is something I manually inputted in Line 17(b) on turbo tax and it is incorrectly importing this value to line 20, when line 20 is supposed to be capped at $7,000. Can you see if Turbo Tax can amend their Schedule H inputs to reflect NY's status as a credit reduction state? Happy to explain further over the phone.
The instructions to line 20 of schedule H refer you to line 15 of schedule H and stipulate that you not enter more than $7,000 of wages for one employee. Line 17(b) is for the taxable wages for FUTA tax. So, that would be $7,000, assuming you just had one employee. I am assuming you are working in the federal section of TurboTax for these entries.
I see that you are requested to enter the taxable wages as defined by state act, but the instructions to line 20 refer you back to line 15, which states you should not enter more that $7,000. You should enter the state wages as requested, but you should see a screen in TurboTax entitled Wages for FUTA, on which you would enter the $7,000 figure, and that will populate on line 20 of schedule H. The taxable state wages are used to determine the applicable FUTA tax rate, but not the taxable wages.
@ayhambahnassi {Edited 2/22/23 at 4:51 PM EST}
Line 17b is asking for the taxable wages subject to a state's unemployment insurance fund. My applicable state is NY. And the wages subject to the NY unemployment insurance wage base is not $7,000. It's actually $12,00 for 2022 and it will be $12,300 for 2023. Please see NY DOL website: NYS-45 Quarterly Reporting | Department of Labor . Please see also this link from Ernst & Young: New York employers will pay an interest assessment in 2022 for the state's federal UI loans (ey.com). Please let me know if you now agree that line 17b should be $12,000 for NY residents in light of the 2 sources I am including here. Thanks so much for the time you're spending on this.
Yes, 17(b) should be your state unemployment tax wage base. However, that number is not the same as the federal wage base. The state wage amount is used to determine what the federal tax rate will be, not the wages subject to tax. You should see this screen in TurboTax in the federal section where you enter your nanny tax information, it says Wages for FUTA. You need to enter your FUTA taxable wages there and they will flow to line 20 on schedule H:
The Wages for FUTA screen will only pop up if I check the box next to "I paid or owe unemployment taxes to only one state." This Turbo Tax question is connected to Line item 10. Although I am paying unemployment taxes to only one state, my applicable state, NY, is known as a "credit reduction state." Since NY is a credit reduction state, I am required to leave unchecked the box in Line Item 10 per Line Item 10's instructions. By unchecking this box, I don't see the Wages for FUTA screen. Is there a way to keep this question unchecked and still get the Wages for FUTA screen? If so, how?
I couldn't find a way to leave the box 10 unchecked and enter the correct FUTA taxable wages. However, although the box is checked you still have the correct taxable wages and resultant tax if you enter the correct FUTA wages. There may be an obscure reason TurboTax does not allow you to uncheck the box.
I don't think that's correct. The resultant tax will be off by $20 if I proceed with checking box 10. By checking box 10, I would be filling out Section A (lines 13-16) when instead I am required to fill out Section B (lines 17-24) per the instructions on the form itself located below Line 12 on the Schedule H. The resultant tax calculation is different by $20 if we go with Section A versus Section B because there is no line item in Section A to enter the $12,000 taxable wages. Is there any chance you can ask Turbo Tax to correct this glitch on Schedule H so that my income tax return will be more accurate?
You need to indicate that all of the wages subject to tax on your federal return are also subject to tax in your state, and then section B will be populated, which appears to be true since $7,000 of wages are taxable on your federal return an $12,000 are taxable on your state return:
Hi there. I think you are mistaken again. I checked all 3 boxes like your image shows and it only fills out Section A (not Section B). Section B never gets populated on my end when I check all 3 boxes as shown by your image. Moreover, since only Section A gets populated, the $12,000 is never inputted because no item in Section A is asking for this value. Can you please escalate this matter and ask for Turbo Tax to correct their Schedule H for NY residents so that we are no longer wasting each other's time? Happy to discuss further over the phone.
I don't have a facility to make a phone call. However, you can use the help screen on your TurboTax program to schedule a talk with an agent. They are instructed to not give up on your issue until it is resolved. If they can't give you a satisfactory resolution, then they will escalate it to someone who can. I will send your issue to our quality review department however so someone in authority is aware of it.
Great! Thank you for passing this along to the quality review team. Please also provide my contact information if he/she wishes to discuss over the phone.
In order to take a closer look at the situation you have described, it would be helpful and give us a headstart if we can take a closer look to see what is happening with your tax return.
You can provide us with a diagnostic copy of your tax file to make that possible. The diagnostic file will not contain personally identifiable information, only numbers related to your tax forms. If you would like to provide us with the diagnostic file, follow the instructions below and post the token number along with which version of TurboTax you are using in a follow-up thread.
Use these steps if you are using TurboTax Online:
If you are using a CD/downloaded version of TurboTax, use these steps:
Hi there, happy to participate on this but I don't feel comfortable posting a number on a public forum like this. Can we please take this conversation off-line? You can call me to get the token number. Thanks so much.
Thank you for being willing, but unfortunately, calling to get the token number is not possible for those of us working in this forum.
Just to clarify for you, a token number is simply a 7-digit number that we can use to access the sanitized version of your tax return. Only Intuit employees have access to this system, and the tax file that we can retrieve contains no personally identifiable information. Everything personally significant has been changed to xxxx and only the numbers in the return remain so that we may try to trace any issues you are having.
Having the sanitized tax file gives us a head-start to try to resolve the issue without having to re-create it from scratch and possibly missing something that you had entered for your return.
Hi there - i am filing schedule H in CA (one the of the 4 states with a "credit reduction"). I do not have the issue you described as CA has the same UI Taxable Wage limit as the Fed ($7,000)... I believe my form is computing properly the tax including the additional "credit reduction" for CA.
nevertheless, just tried to file my taxes both the Fed and CA got rejected. any update on this issue? here is the message i got
FED - There is an issue related to Schedule H, Household Employee Taxes. A Software update to resolve this problem is scheduled for release on April 7, 2023.
CA - no message
No update on my end. I ended up filing my return with the error on the Schedule H, and it resulted in me overpaying in income taxes by about $20 or so. But my returns were accepted. It's annoying that turbo tax is now coming around and promising to do a software update to fix this issue (albeit not until April 7th). Why didn't they communicate this to me when I complained? Had I known, I would have held off filing my return until the software update went through. Not to mention, it was frustrating and a big waste of time trying to communicate this glitch to Turbo Tax.
I think it would be helpful if TT can provide regular communication on this issue so we can plan accordingly I'm sure there's a lot of people in the same boat with the returns getting rejected now like what happened to me yesterday and it wasn't super easy to find these foreign posts if you don't know what you're searching for
Can you clarify if you are receiving the same error message listed above, with an expected update by 4/7/2023, or did you receive a different message?
Hi Brittany,
first thank you for your quick response and yes I'm receiving the same message with the April 7 date so I'm assuming there's still some sort of a block that needs to be sorted out to allow us to file either at TurboTax or with IRS
George
Hello - any updates on the issue with the taxes still being rejected for Sch H?