Turbo Tax rejected my return. I was allowed to contribute $37000 using 457(b) special “last 3-year catch-up” deferral, 2x the $18500. How do I fix this problem?

[tomsemetsis]

Turbo Tax rejected my return. It said that "Gov 457 deferrals - TP $37000 is more than the allowed $24500 for a government 457(b) plan. Please check your entries on your W-2 for government 457(b) plans." I was allowed to contribute $37000 using 457(b) special “last 3-year catch-up” deferral, 2x the normal $18500 contribution. Last year, the catch-up limit was $36000 and Turbo Tax had no issues.  This amount appears on my W-2 on line 12a, Code G, $37000. The IRS website clearly says the catch-up provision for 457(b) is still applicable. 

https://www.irs.gov/retirement-plans/how-much-salary-can-you-defer-if-youre-eligible-for-more-than-o...

This is a serious issue which is preventing me from e-filing my Federal and State returns. How do I fix this problem?

[NoMoreTT]

There are two separate issues with 457b "Catch-up" contributions and Turbo Tax has only fixed one of them (the over 50 $6K contribution). The other issue, which is the one you are talking about, is for 2x the annual contribution for the last three years ($37K for 2018) and so far, they has not addressed that, even though there are now dozens of people asking the same question!

I spent an hour on the phone explaining this to a customer service rep, who completely understood me and agreed their program was in error. She forwarded the information to a supervisor and this morning I got an email from Turbo Tax telling me that I was wrong (I'm not) and that their software is correct (it isn't). They told me to print my return and file a paper copy.

Everyone who is dealing with this issue needs to contact Turbo Tax immediately. Maybe if enough people do so, someone will look into and the problem with their program can be corrected.

[thomas-taylor]

I have the exact same problem.  Because of the catch-up provision, I have $37,000 corrected listed on my W-2 (box 12b code "G".  Turbo Tax has not corrected this error and I too am prevented from e-filing my returns.  This is unacceptable (I use TurboTax Premier).  Here is the IRS link:  <a rel="nofollow" target="_blank" href="https://www.irs.gov/retirement-plans/how-much-salary-can-you-defer-if-youre-eligible-for-more-than-o...>

[marksawicki]

Same here. All set to file (and TurboTax has already charged me for e-filing), but it now says it can’t process because of the “error”, or I have to file by paper. Definitely a flaw in their software

[thomas-taylor]

I am printing out my returns now.  I will need to get my State e-filing cost refunded and will check into other compensation for not being able to e-file the Federal and the cost of having to print 45 pages.  What is difficult to believe is that they were able to accommodate this same situation for tax year 2017 (when the catch-up provision allowed up to $36,000) and now they are unwilling to correct it.

An additional, unrelated concern was with the entering of the K-1s which also blocked my filing.  In the end, I had to create two separate entries for the single K-1 investment (but at least it was correct as some of the suggestions were to enter the amounts in the wrong fields).

[bpsjazz]

I will be calling Turbo Tax for a refund if they do not resolve this issue soon.

[aconnors]

I have the same problem.  $37000 contribution to govt 457b as catchup in the last year before retirement.  It only came up after the last update was installed.  What is the number to call?  I also had paid for my state efile before it told me I could not efile. Very frustrating

[thomas-taylor]

They will not resolve this specific configuration issue this year (just so you know).  Through the support link, they will issue a phone number and a reference code once you put in a very brief note about the issue (do not use the word "refund").  I asked for my state filing money back and, in addition, they gave me back 10% of my software expense (~$10).  My wait time was this morning was 5 minutes but, once a person calls, they offer a call-back feature if you don't want to hold.  The customer service person was very helpful but could not do anything to allow me to e-file.

[bpsjazz]

I also talked to a CPA at TurboTax.  No solution this year - filing paper copy for the first time in many years.

[paulf7122]

I have the same problem. Although I entered my $37000 as a 457(b) contribution, the program enters it as a 457. It is entered on line 12d, which is a 457. The entry should be on 12c, which is for a 457(b). The program will not let you enter it on the proper line, so you can't file your return.

[NoMoreTT]

It doesn't matter which line the amount is listed. Turbo Tax will not allow any contribution over $24,500 so everyone who did the 2x amount allowed for their final three years will get rejected for e-file. They are aware of it but said they will not be able to update their system before April 15th so we all have to print our returns and file by paper. Very frustrating!!

[Anonymous]

I have the same issue.  Very disappointing not to be able to eFile.  And disappointing that TurboTax has not addressed this.  Erodes confidence in their software - wondering what other nuances are not addressed?  

[mdkerman]

Same problem and Turbo Tax took $24.99 to E-File my state return and now will not file.  Having to print and file is a huge waste of time and undercuts the reason to buy Turbo Tax.

[FredC]

I have the same problem. Being over 50, I contributed $24,500 to 457(b) and TurboTax complains that it is the above the allowable limit of $18,500. I installed the latest update to no avail. Will TurboTax resolve this issue on time before the filing deadline?

[paulf7122]

I spent over an hour and a half yesterday on the phone with tech support. After half an hour explaining the situation, I was elevated to a supervisor. I think I spent more time explaining to them about the issue than they knew. They hadn't heard about it and started reading about it here and checking the IRS site to see if it was really allowed.  I ended up mailing my returns. I asked why didn't all the error checks didn't pick up on this, but when I went to transmit, the error came up (not really an error on my part, but theirs). Then it brings you to the line item they want you to correct, and you can't even make a change anyway. I've been using TurboTax for about 20 years, and never had this problem. Last year I did the 36,000 with no problem. This year I am doing the $38,000 allowed. Can't wait to see what happens when I do my '19 taxes. Many of my co-workers are doing this same contribution, and none of them had problems with different methods of filing out there, many free. Makes you wonder why I paid $100 for this program. Anyway, they refunded my State filing fee, but wouldn't give me anything for the defective program itself because I bought it from a retailer, and not directly from them. Like they still didn't make a profit on it!  I guess next year it will be time to shop for alternatives.