Restricted Stock Units (RSUs) - Smart Check Error on 1099-B Worksheet

[mmp151]

I received and sold Restricted Stock Units (RSUs) from my employer in 2020. Since these RSUs are included in my W2, in prior years I just put in the proceeds and cost basis for each lot. But this year it looks like RSUs fall under employee stock plans (maybe they did in past years and I didn't catch it) so I have to fill out a few more worksheets; none of which change my taxable income or federal / state tax due. However, during the Smart Check review, I keep getting errors on four of the worksheets on Form 1099-B section 25, after the lot is listed, the next line is blank and its looking for me to enter something but it should be blank. I had 10 sales, it looks like this only impacts 4 sales of which all shares were sold to cover taxes. Anyone else having this issue? Any recommendations? 

[DavidD66]

If you received a stock award (e.g. Restricted Stock, or RSUs), tax is assessed on the value of the stock on the day the stock vests/ is delivered.  That amount is ordinary income, and is included in Wages on Box 1 of your W-2 for that year.  Your cost basis is also the value of the stock on the day it vests or is delivered.  The problem is, brokers don't have (or don't report) that information.  If you know the amount that was added to your income, that is your actual cost basis.  In order to keep from paying tax on the stock award twice, you have to correct your cost basis.  To do so, go to that 1099-B transaction, and on the page with the Description, Date Acquired, Date of Sale, Sales Price, and Adjusted Cost or Other Basis, click on "I'll enter additional info on my own".  On the next page, enter the "Corrected cost basis"

[lrmiller7]

DavidD66:

Like the person you were replying to, I had RSUs that vested and were distributed to me, which I sold [for both long and short terms losses! :( ]. My 1099-B provided the correct basis information to me, but did not report it to the IRS. Using what is shown on my 1099-B, I entered the basis information into Turbotax, which calculated my losses into the return. Smart Check Error, however tells me on each entry that "Employer Worksheet:  Line 25, Column (b) should be entered."  I have no idea what should be entered, where I would obtain that information, and where this worksheet can be found. Is this material to my return?  Can I just ignore it and file?

Additionally, after entering that information for each sale, Turbotax asks me to enter information about the vesting of the RSUs, which seems to me to be irrelevant, since the only RSUs I sold had fully vested and been distributed to me. I have ignored the fields on that page, as nothing I have from my employer regarding vesting matches the transactions in which I sold the shares distributed to me.

Additionally, I note that the IRS withheld amounts from all these sales, even though they were losses. How do I reclaim the amounts withheld?

Thank you.

[Dsjr]

I have the same problem as DavidD66. I initially imported information from Fidelity, but then tried inputting the information on my own. No matter what I do, it keeps telling me there is an error on Line 25 Column B. It is telling me to enter information in row 2. I have no idea what I am supposed to enter. I sold 1 unit which is listed in row 1. But since I only sold 1 unit, I shouldn't have to enter anything in row 2. It makes no sense. 

Is there a way to bypass the Smart Check Error to file my taxes?

[Dsjr]

Oops. I meant to say I have the same problem as lrmiller7.

[lrmiller7]

David:

What I did was enter the corrected cost basis shown on the 1099-B from Fidelity for each of the RSU lots that were vested and distributed to me.  However, turbotax asked me to add additional information regarding the vesting of those lots, which I did not enter, because it makes no sense to me how that could be relevant, when I only could sell shares that had vested and I had paid for. Additionally, when I went to my employer's web site to look for vesting, it was reporting very small quarterly numbers of shares vested which did not correlate at all to the amounts of shares being sold in my 1099-B. So I felt this had to be a blind alley, so I ignored those data fields in Turbotax. However, when I ran checker at the end, for every transaction in the 1099-B, I got the error message to state that Line 25, column (b) of the employer stock worksheet should be entered.

Where is this worksheet, how do I see it, and where do I get the data to enter?

Beyond that, these transactions were all losses, and yet Fidelity reported them to the IRS as gains, because it did not report  the basis to the IRS (which it  knew and reported to me).  Fidelity's 1099-B also stated that it withheld substantial amounts from its distribution of the proceeds. How do I confirm whether this 1099-B that was automatically entered into Turbotax (incorrectly without reporting the basis Fidelity knew) correctly reported the substantial amounts it withheld?

I suspect it did not, because Turbotax is calculating a refund for me that is only a little more than last year's, and I had none of these transactions in the previous year.  It seems to me that with all these transactions being losses, I should get a refund of all the amounts withheld, and they are substantial.

Is there a way I can talk to an expert at Turbotax to get to the bottom of this?  Please?

Thank you.

[alicaceres]

I am having the same error.  It would be great if Turbo Tax provided additional context on the RSU questions or more examples.  Turbo tax smart check is complaining on all my RSU transactions where  the only transaction was to cover for taxes in 2020. 

[alicaceres]

I was able to fix the errors in this worksheet.  TurboTax is trying to calculate the RSU income based on the information provided and will then ask you to double check it.  I do encourage people to fix the errors because while it did not impact my stock gains, for some reason the AMT came out way differently and my tax liability went down. 

I got this error when I didn't correctly entered the number of shares vested for the lot.  This is important for all those RSU  lots vested during the year (2020 this case).   If you sold shares from the same lot multiple times during the year you need to divide the number of shares vested across these transactions appropriately.  For example, I vested 200 shares.  70 were sold for taxes.   Then I sold 30 shares later in the year.  You need to put 140 (70% of 200) as the vested shares in the worksheet for the 70 shares.  And 60 (30% of 200) as the vested shares for the 30 shares transaction.   

I hope this helps other people.

[lrmiller7]

I have good news to share to the members of the community struggling with this issue. I have just filed all my returns and am waiting for my refunds. Now, here is the issue, and the fix.

I had RSUs which I sold in 2020. My custodian, Fidelity, issued to me a 1099-B with all the crucial information, and ONLY SOME OF IT DOWNLOADED TO MY TURBOTAX RETURN. Revealingly, all the transactions were losses but: (1) Fidelity knew, and reported to me on the 1099-B, my basis on all the sales, but did not report it to the IRS (Why?) Instead, it reported the sales as gross to the IRS, and withheld substantial amounts that were not due, because the trades were losses, (2) The download to Turbotax did not include the basis for each of the sales, which I had to enter manually.

The problem in Turbotax was that it kept throwing errors on my Federal return relating to the 1099-B. In every case where I entered the basis, Turbotax followed it with another screen asking for information about the vesting of the RSUs. I had left that blank on all the entries. Who needs to ask about vesting?  You can't sell shares you don't own!

The fix was that for each entry, I went to that additional screen and just entered the number of shares in each lot sold. That very same number already appeared in several prior fields. For some stupid reason, that number of shares did not auto-replicate from one screen to the next - for the same transaction -- and that caused the problem.

That is the fix, folks. When you get to the screen in the worksheet that is throwing errors, just make sure that you have the number of shares sold in the top line and close out of that entry and move on. It will then clear the error check and you can file.

Shame of Turbotax for a stupid software error. Shame on both Turbotax and Fidelity for not automatically downloading the basis data that Fidelity had.

[SAS573]

Hi- I am getting the same errors as above too. I read through all of the fixes above , revisited my entries and still getting the error message.

Just to review how to enter these things :

I entered each transaction per the 1099B as a separate lot. Double checked the processed and cost agreed turbotax to statement. Gain and losses are calculated and both agree.

All of these transactions are included in the W2.

My question is that there were taxes withheld on these sales but I cannot tell from the Charles Schwab statement which lot they apply to.

How do I adjust for these taxes ? or do I?

thanks

[subbaraon]

Thanks much Irmiller7!

I ran into the same problem. After struggling for a while, I came upon your response to this problem. Your suggestion worked for me! I was able to file my taxes after the problem was solved.

Thanks,

Subbarao

[dseptNC]

This is definitely a bug.  When I re-enter # shares again during smart check as suggested, it creates another line entry and the duplicate transaction results in higher tax due.

[JAS_Wreck]

This seems to have been around for a while.

If I put 1 share, that was sold for tax purposes, I get 1 share in column 'g' that was held.  The application then complains about the next empty line.

Looking for relevant information, or a way to escalate this to get it corrected after seeing this for a number of years.

[DavidD66]

RSUs are pretty straight forward; therefore, I recommend you enter your transactions without indicating you are reporting the sale of company stock.  Indicating that is company stock has no impact on what's reported to the IRS.  It only affects what screens and questions you get in the TurboTax interview.  In addition, I recommend manually entering transactions for RSUs, as opposed to downloading them from the broker.  When RSUs vest (the stock is delivered) the entire amount is ordinary income.  Your employer must collect payroll taxes, or sell shares to pay it.  Since you are taxed on the entire amount, you basis is the amount that is added to your W-2 which you are taxed on.  If you retain the stock, any gains on the sale will be short term if you hold the stock one year or less, and long term if you hold it more than one year.

[Moyang70]

This solution creates a new error. Now TurboTax says that Line 25 column c cannot be later than the date sold. And yet, there is no place to enter date sold on the worksheets. The yellow highlighted field shows the date vested, instead.