I live in NY and am filing Schedule H. Line 20 should be capped at $7,000, but Turbo Tax software is entering a much larger value ($12,000). How do I fix this glitch?

[ayhambahnassi]

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)?  

[ThomasM125]

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.

[ayhambahnassi]

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. 

[ThomasM125]

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.

Schedule H instructions

@ayhambahnassi  {Edited 2/22/23 at 4:51 PM EST}

[ayhambahnassi]

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.  

[ThomasM125]

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:

[ayhambahnassi]

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? 

[ThomasM125]

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.

[ayhambahnassi]

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?   

[ThomasM125]

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: 

 

[ayhambahnassi]

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.  

[ThomasM125]

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.

[ayhambahnassi]

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. 

[AnnetteB6]

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:

• Sign in to your account and be sure you are in your tax return.
• Select Tax Tools in the menu to the left.
• Select Tools.
• Select Share my file with agent.
• A pop-up message will appear, select OK to send the sanitized diagnostic copy to us.
• Post the token number here. 

If you are using a CD/downloaded version of TurboTax, use these steps:

• Select Online at the top of the screen.
• Select Send Tax File to Agent.
• Click OK.
• Post the token number here.

@ayhambahnassi 

[ayhambahnassi]

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.