2210AI LTCG & QDI workaround

TxUser2014b · ‎April 6, 2022

@Tax4fp Most of this information was previously provided by Tax4fp in a previous post.

Applies to TTax2021 Dlx desktop (possibly others):

After fix level R24 applied on 04/05/22. This info may have been posted by someone else previously. The problem with failure to annualize the quarterly amounts for LTCGs is STILL NOT FIXED with this patch level. The incompetence of TTax developers is now legendary!

There are 3 workarounds that will enable you to file your taxes. In my opinion the best is option one since it replicates the process used on the Capital Gains and QDI worksheet used to compute the tax.

1. Combine the amounts for LTCG and QDI by quarter and enter the combined amount in the appropriate column of the QDI row. Enter zero for each quarter in the LTCG row. The QDI amounts are being annualized and the tax on line 14 is correct (at least for me).

2. I don't recommend. Combine the amounts for LTCG and QDI by quarter , manually annualize them by quarter, and enter the combined annualized amount in the appropriate column of the LTCG row. Enter zero for each quarter in the QDI row. This option will give incorrect results if TTax ever fixes the LTCG annualization problem.

3. I don't recommend. Manually annualize the amounts for LTCG by quarter and enter them in the LTCG row. Enter the NON-annualized QDI amounts in the QDI row. This option will give incorrect results if TTax ever fixes the LTCG annualization problem.

I tested all 3 of these options and they all gave identical (correct) results.

Tax4fp · ‎April 7, 2022

The latest update on 4/7/22 still does not fix the errors in Form 2210AI line 14 (a)-(c) that result in incorrect tax calculation whenever long term capital gains occur in any of the first three payment periods. As you note, option 1 provides the correct answer whether or not TT ever fixes their calculation.

I did find that the latest regular update on 4/7/22 appears to fix the Form 2210 error with 2020 refund to be applied as credit for 2021. After this update, the amount of this refund credit increased Form 2210 line 11(a) by the amount of this carryover credit. The manual update R24 on 4/5/22 still hadn't fixed this other error.

Tax4fp · ‎April 21, 2022

Update on 4/20/2022 finally fixed the tax calculation error in Form 2210AI line 14 (a)-(c) where LTCG was not being scaled each period as IRS required for these calculations. Too late to help anyone who filed on or before due date for 2021 federal taxes.