Rejected federal return with no guidance to fix

[jerrylotto]

I e-filed my federal return twice.  It passed without any errors but it was rejected both time citing form 8801 line 22.  I have no idea what is wrong.

[JulieS]

Yes, this error is related to Credit for Prior Year Minimum Tax. You can fix it by deleting Form 8801 and then adding it again if needed, using figures from your 2022 tax return. 

First, make sure you have a copy of your 2022 tax return on hand in case you need to get some numbers from it.

Second, delete Form 8801. Here's how to do that:

1. Sign in to TurboTax.
2. Select Deductions & Credits.
3. In the left-side menu, select Tax Tools, then Tools.
4. Select Delete a form, from the list in the pop-up window. 
5. Check the list for Form 8801,  select Delete next to the form.
6. Confirm your Delete, select Continue. 
7. Select Review, and address any details that come up. 

Next, add Form 8801 back to your return:

1. Select Deductions & Credits.
2. Expand Estimates and Other Taxes Paid.
3. Select Start or Revisit to the right of Credit for AMT Paid in Prior Year.
4. Review the links on the first page to see if this section applies to you. If it does, answer Yes, and complete the remaining screens according to your situation. If something doesn't apply to you, leave it blank. 

[jerrylotto]

Didn't work - gonna have to file by mail.

[jerrylotto]

I may have found the problem.  There is a home energy credit deduction from form 5695 entered on line 5b of schedule C that was not subtracted from my 2023 tax liability from 1040 line 16 to calculate 8801 line 22.  The foreign tax credit from schedule C line 1 was subtracted.  Is this a turbotax error?

[MonikaK1]

The home energy credit from Form 5695 goes to Schedule 3 (not Schedule C). The nonrefundable credits including the energy credits on Schedule 3 go to Form 1040, line 20, where they are combined with any dependent credits on line 19, and the total appears on line 21.

Line 18 minus Line 21 equals Line 22, or zero if less than zero.

The Instructions for Form 8801, Line 22, indicate:

1. Follow the instructions below and refer to your 2023 income tax return to figure the amount to enter on line 22. Form 1040, 1040-SR, or 1040-NR. 
2. Add the amounts from Form 1040, 1040-SR, or 1040-NR, line 16, and Schedule 2 (Form 1040), line 2. 
3. Subtract from the result the total of any credits from Form 1040, 1040-SR, or 1040-NR, line 19 and Schedule 3 (Form 1040), lines 1 through 6z (not including any credit for prior year minimum tax on line 6b or any credit claimed on Form 8912, Credit to Holders of Tax Credit Bonds, on line 6k).
4. Enter the result. If the result is zero or less, enter -0-.

If you would like us to troubleshoot this issue further, you may send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, here are the instructions for TurboTax Online users: 

Go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

If you are using TurboTax Desktop please comment back and I will give you those instructions.

[jerrylotto]

Monika - I typed the schedule incorrectly - it is on Schedule 3 not Schedule C.  Regardless, the error I am encountering is related to how Turbotax (mis)calculates line 22 on form 8801.  Only the incorrect value passes review.  I contacted Intuit and they told me that they were aware of the error and would fix it in a future update.  I requested that they contact me when the update to fix this problem is released.

[jerrylotto]

PS -yes, I am using the desktop version of TyrboTax and need directions to "share with an agent" for that application.

[MonikaK1]

Thank you for bearing with us. We have been advised that a fix for this issue was to be deployed on or about March 15th, so at this point, we shouldn't try to diagnose your file in its current state. Instead, you might try filing again now, and look for further updates.

[HARDWAREDWEEB]

I had the same problem. My federal and state tax returns were rejected due to a Form 8801 error. It's March 17th, and I am still waiting for the TurboTax patch that was supposed to be released on March 15th.  

[jerrylotto]

Monika - has the "fix" been released and are you going to post directions for fixing the problem for users of the desktop version of Turbotax?  The last update installed was released on March 14 - and since you do not have any release notes - I have no way  to determine if the problem has been fixed and no guidance on what to do once it is.

[HARDWAREDWEEB]

TurboTax is running five days behind schedule.  It is March 20th and the software patch has not been released yet. 

Turbotax team, could you provide a status update, please?

[jerrylotto]

Update released today for TT Deluxe - possibly all versions fixed problem!

[jerrylotto]

PS - installing the update was sufficient - no need to perform any maintenance steps on the return.  However both state and federal taxes changed as a result.  I've gone through an entire ream of paper and a laser printer toner cartridge with this whole debacle - but my efiled federal return was accepted by the IRS so I have validation that the fix worked.