FED & State returns rejected due to joint occupancy processing error on form 5695 that will be corrected on 3/17/25. TT says I can mail returns. Anybody seen this?

[CatinaT1]

If you have Form 5695 and claiming joint occupancy, the IRS will not be accepting these returns until 3/16/25. You can see this on this IRS site. The language you see below is from Row 39 of the Tax Year 2024 spreadsheet.

Taxpayers claiming Joint Occupancy on Form 5695 will have to file via paper if filing their return before the Form 5695 schema is updated in mid-March. This temporary limitation should only impact a subsection of Form 5695 filers.  For a preview of the TY24 draft form and instructions for Form 5695, please see the Draft tax forms on IRS.gov at https://www.irs.gov/draft-tax-forms. Submission of Forms 5695 that do not claim Joint Occupancy may be e-filed at the start of Processing Year 2025

[jeffhatesspam]

I assume the answer is correct, but there are several things that bother me about this issue.

1.  It bothers me that Turbo Tax tells me I have no errors on my returns, I have a low chance of audit of my returns and my returns are ready to file when form 5695 has not been finanlized by the IRS and I can't file my returns.

2.  It bothers me that Turbo Tax took my money to e-file state returns when Turbo Tax knew my returns would be rejected because form 5695 that is associated with my Federal returns had not been finalized by the IRS.

3.  It bothers me that Turbo Tax is not ready to use to file my taxes and Turbo Tax did not warn me of the potential issues with form 5695 before I installed the program and lost any chance of returning it for a refund.

4.  It bothers me that Turbo Tax tells me I can "file via paper if filing their return before the Form 5695 schema is updated in mid-March".  How can Turbo Tax "guarantee" my returns have no errors and are ready for filing if the schema associated with Form 5695 has not been updated.

[peterk789]

I’ve been using Turbo Tax for 10+ years and this has been the worst experience ever! Along with 5695 error, I spent hours entering in missing data imported from my financial investment account. Considering trying another way to file my taxes next year. Comments welcome!

[Dav Hank]

Now Intuit says not fixed until April 4th. That's the 3rd push.  They should refund the e-file payment to all involved.

[AnnetteB6]

The IRS updated the system this week to start accepting e-filed tax returns with Form 5695 Joint Occupancy. However, a processing problem still exists. To ensure the accuracy of tax returns, TurboTax is working hard to eliminate the issue. The expected resolution date is April 4, 2025. On or after that date, please log back into your TurboTax account, fix any error messages and e-file your tax return. 

There is also an option to print and mail your return. If the special rule for joint occupants applies to you, please make sure that the box on line 32a of Form 5695 is checked. Then attach a statement to your printed return that explains how the special rule applies to your situation. 

This statement should include:

• The names and Social Security numbers of all joint occupants.
• A description of the property and the nature of the improvements made.
• An explanation of how the costs were shared among the joint occupants.

TurboTax does not automatically generate this statement, so you will need to create it yourself. Make sure to include this statement when you mail your tax return to the IRS. 

Here is a possible template that you can use:

Statement for Special Rule for Joint Occupants

Taxpayer Name: [Your Full Name]

Taxpayer Identification Number: [Your SSN or ITIN]

Tax Year: [Year]

Names and Social Security Numbers of Joint Occupants:

[Full Name of Joint Occupant 1], [SSN of Joint Occupant 1]

[Full Name of Joint Occupant 2], [SSN of Joint Occupant 2]

(Include additional names and SSNs if applicable.)

Description of Property and Improvements:

The property is located at [Property Address]. During the tax year, the following energy-efficient improvements were made to the property:

[Description of Improvement 1] (e.g., installation of solar panels, energy-efficient windows, etc.)

[Description of Improvement 2] (if applicable).

Explanation of Cost Sharing:

The total cost of the qualified energy-efficient improvements was $[Total Cost]. The costs were shared among the joint occupants as follows:

[Your Full Name]: $[Amount Paid by You]

[Joint Occupant 1's Full Name]: $[Amount Paid by Joint Occupant 1]

[Joint Occupant 2's Full Name]: $[Amount Paid by Joint Occupant 2]

Based on these contributions, I am claiming my allocable share of the energy-efficient home improvement credit. My share was calculated as follows:

Credit Allocable to Me = (Credit Limit for Property) × (Amount Paid by Me / Total Amount Paid by All Occupants)

@Dav Hank