Is TurboTax not capable of acknowledging and fixing an error with the Montana Senior Interest Income Exclusion for qualifying taxpayers and spouses over age 65?

[pkck4321]

My wife and I are both over age 65 and have jointly owned accounts with more than $1600 interest income earned and included in our Montana adjusted gross income. In our 2023 Montana tax return, Married filing Separately, Form 2, Page 5, General Subtractions, Line 3, TurboTax enters a $0 exclusion for me and an $800 exclusion for my wife.

This TurboTax error was a subject of two TurboTax Community discussions last year:

“Montana's Partial Interest Exemption for taxpayers 65 and older (Montna Subtractions Schedule Line 3...” -discussion begun by May507 on 3/9/2023

“Can anyone explain why TurboTax 2021 gave the Montana Senior Interest Income Exclusion of $800 to bo...” -discussion begun by me 3/26/2023

Noteworthy facts:

• Montana Administrative Rule 42.15.215 allows this interest income exclusion for taxpayers and their spouses, and there have been no changes to this administrative rule since 2009.
• In the 2021 Montana tax return prepared with TurboTax 2021 (Costco CD product), my wife and I both correctly received the Montana Senior Interest Income Exclusion of $800 (a total of $1600).
• In the 2022 Montana tax return prepared with TurboTax 2022, my wife was given the $800 Interest Income Exclusion, but I was not. TurboTax 2022 gave me an Interest Income Exclusion of $0.
• The TurboTax software does not allow the user to override and correct this error.
• In 3/2023, after wasting hours in the TurboTax Community discussion (receiving erroneous replies from “TurboTax Employee Tax Experts”) and a 3/28/2023 2.2-hour phone discussion with TurboTax Employee Tax Experts (who tested and confirmed the error and concluded that my Costco 2022 TurboTax CD product was flawed), I admitted defeat and e-filed the Federal and Montana returns for me and my wife.
• In a 3/30/2023 letter to the Montana Department of Revenue, I described the TurboTax 2022 error, and they agreed that Montana Administrative Rule 42.15.215 allows me and my wife to each receive the $800 Interest Income Exclusion ($1,600 total) in our Montana – Married filing Separately tax return.
• Montana Department of Revenue dealt with the TurboTax 2022 reporting error by sending me a 4/4/2023 Adjustment Notice, giving me the $800 interest exclusion, thereby reducing my MT 2022 income tax. In summary, Montana Department of Revenue allowed both me and my wife to receive the Montana Senior Interest Income Exclusion of $800 (a total of $1600) for Tax Year 2022.

To my dismay, TurboTax 2023 has the same error as TurboTax 2022 and again enters a $0 Montana Senior Interest Income Exclusion for me and an $800 exclusion for my wife.

Is TurboTax not capable of acknowledging and fixing this error with the Montana Senior Interest Income Exclusion for qualifying taxpayers and spouses over age 65?

[May507]

     I am also waiting for TurboTax to address their calculation error on this topic. 

     This error has now occurred for both the 2022 and 2023 tax filing years.  The result of this calculation error is that some qualifying tax payers over 65 years of age, with taxable interest, are not receiving their rightful interest exemption when using filing status of 'Married filing separately on the same form.'   I would think this situation  warrants a valid review under the Accuracy Guarantee that Intuit promotes.       

[BillM223]

@May507 

@pkck4321 

Please see "TurboTax Maximum Refund Guarantee – Individual Returns. "  This appears to be the guarantee that might apply to your situation...read through the text and see if you want to file a claim under this guarantee.

[May507]

Thank you for the link to 'TurboTax Maximum Refund Guarantee-Individual Returns' that you said might apply to our situation.

I was able to find this section on page 38 of a very large 'Intuit Terms of Service' document.   Unfortunately, it does not apply to this situation.  Browsing thru the rest of document I still could not find an applicable section.

So that there is no doubt about my interpretation of this referenced guarantee,  I have included a snapshot of the qualification section from Intuit's document in next paragraph:

           'If you are a registered user of TurboTax and use TurboTax for preparation and filing of your 2023 individual return, and later file an amended return using identical information and data but using a tax preparation method other than TurboTax, and you receive a larger refund amount or pay a smaller tax due amount using such alternative method (excluding where any tax law changes made by federal or state governments after your original TurboTax-based return was filed cause a change in refund or tax due), then Intuit will refund to you the applicable purchase price actually paid by you for the preparation and filing of your 2023 federal and/or state individual return using TurboTax Services.'

      I am sorry to say that my experience with trying to report a calculation error to TurboTax has failed to get an acceptable result.   The result expected is for product errors to be investigated, fixed and appropriate financial relief given to compensate your customers.  That is the way to maintain a good product and satisfied customers.

[pkck4321]

Four weeks (28 days) have passed since my 3/29/2024 post, which has had more than 2150 views. To this date,  there has been no reply to my post by a TurboTax representative. My question remains:

Is TurboTax not capable of acknowledging and fixing an error with the Montana Senior Interest Income Exclusion for qualifying taxpayers and spouses over age 65?

Is there another avenue that I should take to have TurboTax fix this error?

[pkck4321]

TurboTax Community follow-up post by P.B. Kilzer 6/26/2024

My 3/29/2024 post has had more than 4150 views but no reply from a TurboTax Employee Tax Expert or other TurboTax representative.

Current Remedy: The Montana Department of Revenue has again provided a work-around for the TurboTax reporting error by allowing $800 interest exclusion for me and for my wife ($1,600 total exclusion) and refunding the tax overpayment.

Long-Term Remedy: This TurboTax error in reporting the Montana Senior Interest Income Exclusion will be corrected by Montana tax law changes. These are summarized by the Montana Department of Revenue in the Montana Tax Simplification Resource Hub. Tax Year 2024 brings changes to filing statuses, tax brackets, and the calculation of Montana taxable income. Taxpayers aged 65 and over will receive a $5,500 subtraction from federal taxable income. Among the deductions that are repealed is the partial interest income deduction for taxpayers aged 65 or older.