turbotax icon
turbotax icon
turbotax icon
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Points not reported on Form 1098 not carrying forward correctly to California CA (540)

I had this issue and resolved it with an override so I wanted to share the solution.  The taxpayer refinanced a mortgage on his primary residence.  He was amortizing points over the life of the mortgage.  All remaining unamortized points were recognized in the year of refinance.  On the California State return, TurboTax entered a negative number in the Additions column of CA (540), zeroing out the Federal deduction on CA (540) line 8c Points not reported to you on Form 1098.  TurboTax allows you to replace the negative number with a zero.  However, it later flags it as an error.  To remove the error flag, go to Forms, scroll down to California Individual and then to Ded Home Mort.  In Part 1 - Home Mortgage Loan Information, go to Amortized Points allow. in 2018.  This number was incorrect so I right clicked it, selected Override, and then typed in the right number.  I also checked the No box for Points were reported to you on 1098?  This form also had an incorrect number for Home acquisition debt and grandfathered debt on date debt was last secured by home because it added the balance of the paid off loan to the new loan.  

Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Best answer

Accepted Solutions
GinaG
Intuit Alumni

Points not reported on Form 1098 not carrying forward correctly to California CA (540)

5 Replies
GinaG
Intuit Alumni

Points not reported on Form 1098 not carrying forward correctly to California CA (540)

null

Points not reported on Form 1098 not carrying forward correctly to California CA (540)

This error is still there in year 2020.   No one in Turbotax know to fix this.  Hope someone noticed and fix this for good.  

Cynthiad66
Employee Tax Expert

Points not reported on Form 1098 not carrying forward correctly to California CA (540)

There is a known problem with Home Mortgage Deduction.  TurboTax is working to fix the problem and the many other issues. There are many changes due to the CARES Act that require software upgrades.  We have not been given an  expected date for the fix yet.  Please check back often to see if you can file your return.  

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Bandit124
Returning Member

Points not reported on Form 1098 not carrying forward correctly to California CA (540)

I am experiencing the same problem on my 2020 CA return as described in the post by Dorothy on 31 Mar 19.  For the "Amortized points allow. in 2020" line in Part 1 of the CA Deductible Home Mortgage Interest Worksheet, TurboTax appears to pull from Line 10d on the Federal Home Interest Worksheet  worksheet, which is the amortized points allowable for 2020 as calculated for a loan not paid off in 2020.  However, for the case of a refinanced loan, all remaining amortized points are allowed in the year refinanced.  The Federal Home Interest Worksheet correctly reflects this in Line 10e.  The CA worksheet appears to treat this correctly only for the case where the points deduction was not allowed on the Federal return due to the proceeds not being used to purchase, build, or improve the home secured by the loan.  It does not appear to treat correctly the case where all remaining points are deductible in the year the loan is paid off.  My return has 3 Form 1098s that highlight where TT is correct and where incorrect.  Form 1098 #1 - Mortgage refinanced in 2020.  Points allowable = $63.  Points deducted = $843 due to deducting all remaining points.  TT incorrectly calculates $-780 for 540 CA addition.  Form 1098 #2 - Existing refinance on a separate property where funds not used to used to purchase, build, or improve the home secured by the loan.  Points allowable = $244.  Points deducted = $0 due to Federal disallowance.  TT correctly calculates $244 for 540 CA addition.  Form 1098 #3 - The mortgage used to refinance #1 in 2020.  Points allowable = $185.  Points deducted = $185.  TT correctly calculates $0 for 540 CA addition.  Overriding the $63 with $843 for Form 1098 #1 on the "Amortized points allow. in 2020" line in Part 1 of the CA Deductible Home Mortgage Interest Worksheet appears to produce the correct addition on the 540 CA but I have not yet convinced myself that it has caused no harm elsewhere.

JoannaB2
Expert Alumni

Points not reported on Form 1098 not carrying forward correctly to California CA (540)

Yes. Turbo Tax automatically carried over your itemized deductions from your federal return to your California return. However, you may need to make manual adjustments on some of the deductions California return on such mortgage interest and points. To make the adjustment on your California return:

  • In Turbo Tax home screen, select State.
  • Click Your state return tab.
  • Click California.
  • Keep going until you see "Here's the income that California handles differently?".
  • Select mortgage interest adjustment, click start.
  • Enter the amount of adjustment in "Adjustment for points not reported on 1098 form". 

 

Manage cookies