Will TurboTax update the software to include form 4626 for c corporations? The IRS wants this form to be completed. Help.

[LenaH]

CAMT (corporate alternative minimum tax) calculated on Form 4626 usually applies to very large corporations with average AFSI (annual financial statement income) exceeding $1 billion dollars. According to Form 4626 instructions, unless a filing exclusion applies, a corporation must file Form 4626 to determine whether it is an applicable corporation and, if it is classified as an applicable corporation, to calculate CAMT. However, one of the filing exclusions for Form 4626 is that it is not an applicable corporation under the simplified method.  

For corporations with AFSI (Adjusted Financial Statement Income) of less than 500 million, users can confirm that they meet the requirements of the safe harbor method (simplified method) directly on the 1120 and do not need to file Form 4626. If the wrong box is checked on Line 29c of the 1120, the IRS will send a notice stating you need to include Form 4626. Please see the screenshot below for additional clarification. 

Since you have received an IRS letter regarding this issue, you have two options. You can either file an amended tax return with an updated Form 1120 with line 29c box checked yes or you may also respond to IRS letter according to the instructions in the letter. 

[pairahoos]

TURBO TAX POPULATES  Schedule K line 29C WRONG.   You must override the answers in this section.

Unfortunately Turbo Tax automatically populates NO on box 29C of Schedule K.   In the business interview section the user is not asked if the company qualifies as a safe harbor.   There are 2 questions related to Alternative Minimum tax -- but this 3rd crucial question is not asked and the box is automatically populated with the answer NO.    So that is an error in the software.  The first question asks if it is an applicable corporation and the explian this link says "If the average adjusted financial statement income for the three prior years is $1 billion (or $100 million if a foreign-parent multinational group), the corporation is an applicable corporation"

If you answer NO then the next question asks if the corporation is currently applicable because of a prior year. 

However if you answer YES to question the followup question changes to "Does the corporation meet the requirements of safe harbor".

On the face of form 1120 section K questions 29a to c the if then logic is documented and Turbo tax has it WRONG in the PROGRAM.   A NO to 29A is presenting 29B instead of 29C - and it populates row 29C even though the question was never asked.   A  YES to 29A is presenting 29C it is supposed to show 29B and then based on that answer show 29C.   And a NO to 29A is presenting 29B instead of 29C

The PROGRAM LOGIC IS WRONG FOR SCHEDULE K line 29A and NEEDS TO BE FIXED.

Tax form:

29 Corporate Alternative Minimum Tax:
a Was the corporation an applicable corporation under section 59(k)(1) in any prior tax year? . . . . . . . . . . .
If “Yes,” go to question 29b. If “No,” skip to question 29c.
b Is the corporation an applicable corporation under section 59(k)(1) in the current tax year because the corporation was an applicable corporation in the prior tax year? . . . . . . . . . . . . . . . . . . . . . . . . .
If “Yes,” complete and attach Form 4626. If “No,” continue to question 29c.
c Does the corporation meet the requirements of the safe harbor method as provided under section 59(k)(3)(A) for the current tax
year? See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If “No,” complete and attach Form 4626. If “Yes,” the corporation is not required to file Form 4626

[clamchowder1234]

Hello, 

Follow up question - If I plan to file an amended 1120 to show the correct answer under the simplified method which means I would not need to file Form 4626, how would you respond to the IRS notice?  That an amended 1120 will be filed? Any insights will be helpful.  Thanks! 

[trevor1]

There are several threads about the Form 4626 problem. I suggest new victims go here: https://ttlc.intuit.com/turbotax-support/en-us/help-search?advanced=false&allow_punctuation=false&fi...

and search for “4626” then read the various threads. This is clearly a serious error in the 2023 version of Turbo Tax for Business. I will guess it is sufficiently serious that Turbo Tax will take the trouble to fix it for the 2024 version.