In TurboTax, for filers who have to report household employment taxes, is it possible to apply the required adjustment to FUTA taxes for a "credit reduction state"?

[j-e-murray]

This appears to be a major bug in TurboTax.  If credit reductions are not applied on line 23 of Schedule H, the calculated FUTA tax will be wrong.

[ThomasM125]

You can appy the credit reduction in TurboTax, but you need to use the desktop version of the program. If you use that program,  you will see a worksheet on Schedule H, above line 23, where you can enter information and amounts to have the credit reduction calculated and entered on your tax return.

You can transfer your TurboTax program to the desktop version by saving your return to your computer. You will see an option for this by using the Tax Tools menu option and then Tools while working in the online version of TurboTax. Here is a link to where you can purchase and download the desktop version of TurboTax:  TurboTax Download Programs

[j-e-murray]

Ok, so the online version does do the calculation wrong.  I'm glad I spent a couple more than an hour finding this bug for Intuit.  

Looking into alternative tax software...

[earth777]

Hi - i am using the Desktop version (Home and Business) and i do see the "Smart Worksheet" you are referring to above line 23.  i am in CA and the smart sheet is correctly applying the credit reduction of 0.003.   so all seems good except when i tried to e-file, my Fed and State got all rejected.

any idea?

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

[AmyC]

The state automatically rejects when the federal does. Once the resolution comes on April 7 and the federal is able to be filed, the state will follow.

[earth777]

Amy thank you very much for your quick response and what you say makes sense. 

another question,. I am not experiencing any issues others have experienced.  I'm based in California and we have the same wage limit of $7,000 as a federal and also the desktop version is calculating properly the credit reduction amount as a verified it with my payroll company for my household employee.     I'm assuming my filing was rejected by the IRS not because of an error in this case but just because probably everyone is being flagged for rejection that is part of the issue.   please confirm if I understand is right and if also there is a way to override this so I can submit early. 

[ThomasM125]

The only way you could file early would be to mail in your tax return. If you have a refund and enter direct deposit  information for it, the receipt of your refund would typlically only take a few days longer then if you e-filed the return.

@earth777 

[earth777]

Hi @ThomasM125  / @AmyC  - 

there was a new update pushed today 3/31 for H&B Desktop.  do you know if it addressed the issue with Schedule H?   i do  not want refile and get the taxes rejected again.

thanks

[CarissaM]

It appears they are still working on the issue. You can go to this page, and sign up for updates as to when this is fixed. Hopefully this will make things easier for you to keep an eye on it. @earth777 

[earth777]

Hello  - the page below has been taken down ...  any updates?

https://ttlc.intuit.com/turbotax-support/en-us/help-article/unemployment-taxes/taxpayers-household-e...

[CarissaM]

If you are using the desktop version, please follow the instructions here to manually update the software. 

If you are still having issues, please click here to contact us by phone. 

[earth777]

will do and note that my desktop H&B software us updated.  and i can see the Questions for Schedule H have changed as now it does instruct you to unselect a box if residing in CA, NY, IL etc.  (before this was missing).... so update is here ..  note also that i got the below email last night 10 hrs ago)

TurboTax Support <[email address removed]>	Thu, Apr 6, 10:43 PM (10 hours ago)
to xxxxxx

Dear TurboTax customer,


Thank you for being patient while we investigate your issue.

Rest assured, we're working tirelessly on a solution and will email you when we have more information.

Thank you for being a TurboTax customer.

Sincerely,

TurboTax

[j-e-murray]

Within the last hour, I got the same email from TT, stating that the specific "Schedule H" issue is not resolved.

However, yesterday, around midday, I received an email from TT stating that "my issue"--not identified--had been resolved. I immediately installed the update to the desktop version of TT Premier, and lo and behold, the adjustment for credit reduction states was applied to my return with an accompanying worksheet. I submitted my federal and state returns, and both were accepted.

What a mess this has been.

[earth777]

thanks for the update @j-e-murray   what time yest did you submit the return with success?  or was it today?   i submitted 7am PST yest so maybe i should have waited a few hours for systems to update

@brandauer FYI