NY State tax calculation error 2023

[schindlers1]

I e-filed my NY State taxes and got a letter from them which stated that:

1. They adjusted amount allowed as total itemized deductions on form IT-196 based on limitations, worksheets and information I reported on the form.

2. I claimed an itemized deduction on return that used the incorrect income limitation required under the Tax Law.

3. The taxable income reported reflected a computational error based on information reported on return

4. NY State tax reported reflected a computational error based on the NYS AGI and taxable income reported

5. Adjusted refund to reflect the computation as indicated above.

Is this a software error?  It reviewed and check my forms twice before I submitted it.  It was a $41.89 error.

[AmyC]

You will need to make a claim, see How to submit documentation for accuracy guarantee claims.

[Jwl371]

I had the same error with the exact same language-  Line 34-  NYS stated my standard deduction would be $500 or so less than turbotax calculated.  My error ended up being just over $30 

I am trying to research where NYS is finding their maximum deduction from-  I can see how turbotax calculated it and that appears correct- but there is some NYS law that overrides it 

[ari11210]

I got the same letter from NY State, my difference was also about $41

[AmyC]

NY Itemized deductions (2023) - Tax.NY.gov. I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. Please notify me by adding @AmyC to your response. If I discover a solution, I will reply. Otherwise, it will be moved on to an investigation team.

You can send a token to me by following the directions below:

TurboTax Online:
Sign into your online account.
Locate the Tax Tools on the left-hand side of the screen. 
A drop-down will appear. Select Tools 
On the pop-up screen, click on “Share my file with agent.”
This will generate a message that a diagnostic file gets sanitized and transmitted to us.
Please provide the Token Number that was generated in the response.

TurboTax Desktop/Download Versions:
Open your return.
Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent”
This will generate a message that a diagnostic copy will be created. Click on OK and the tax file will be sanitized and transmitted to us.
Please provide the Token Number that was generated in the response.

@ari11210  @Jwl371 

[Jwl371]

@AmyC 

Token number

1214366

Thank you 

[AmyC]

I have gone through every single form, every line, every worksheet, with a calculator, searching for a miscalculation, a missing line or number, anything out of place. I can identify every number in the NY itemized deduction instructions. Every income limitation, every single form, worksheet, adjustment, all match.

Your letter uses NY AGI  adjustment. The NY AGI is line 33.  The NY itemized deductions uses line 19, the federal AGI in the calculations. You have to subtract itemized deductions to get the NY AGI. I understand if you adjust the deductions you adjust the AGI.

It looks like everything in our system matches the NY itemized instructions. I can read and use a calculator so I am stumped on where NY is getting the change in calculations. You could argue the letter based on their instructions but for a few dollars, it probably isn't worth it.

@Jwl371 @ari11210 

[Jwl371]

Thank you-   Must be a glitch on the NYS side-   I am not going to appeal it.  

[Corpulence]

Hi @AmyC 

I am having the same issue, however it resulted in a $1400 difference between the TurboTax calculated tax amount and the NYS amount. Going through the notice, while NY showed a slightly higher AGI, about $300, than TurboTax, the difference on the calculated tax amount on income (line 38) was $1400 higher than TurboTax. I’ve looked through the tax worksheets provided by NYS but I get to a total that is different from both TurboTax and NYS, and am trying to understand the difference before I file a response.

 Thanks 

[AmyC]

For the tax amount, I am sure you need to use the NY tax worksheets rather than the tax table.

@Corpulence 

[Corpulence]

@AmyC  Yes, that's correct. I am using worksheet 2,but I presume Turbotax should also be using the same worksheets so unsure why it's calculating very differently to the NYS numbe

[RobertB4444]

Fourteen hundred dollars is a big difference.  There must be something in your itemized deductions that has been disallowed.  Is there anything on your schedule A that matches that amount?

@Corpulence 

[Corpulence]

Sadly not. The difference in the itemized deduction amount between my turbotax return and the NYS assessed amount is $300, so should have a minimal impact.

@RobertB4444 @AmyC 

[RobertB4444]

If it isn't the itemized deductions then something that you excluded from income NY thinks should have been included.  For 1400 bucks I would contact New York and find out what they're taxing you on here.  It's possible that they're right but it's equally possible that some computer decided you were wrong and that it just needs to be corrected.

@Corpulence 

[TaxNovice24]

I also got the same letter! NY IRS is stating line 33 in IT-203 was computed incorrectly by TurboTax. Line 33 is coming from Line 49 of IT-196, which is where a discrepancy between Turbo Tax and NY IRS is happening.  This resulted in adjusting my refund and eventually owing more NY tax than originally computed by Turbo Tax.

I’m also stumped on how/what computational error is being caused by Turbo Tax.

I opned a Turbo Tax accuracy guarantee claim but since I didn’t pay any fines/penlaty, there isn’t any help.  @AmyC I can share the case number if you would like to investigate. 

Can someone from Turbo Tax community please acknowledge

/investigate what and why calculation error is going on for NY state tax, specifically on how Form IT-196 is being calculated. Thanks!