TurboTax incorrectly prevents electronic filing due to Foreign Earned Income Exclusion

[objecttothis]

During my Federal Review I get the following message. This problem occurred both in 2024 and 2025.  I contacted TurboTax last year as well.  The IRS says this IS NOT their rule, but TurboTax internal validation that does not properly account for edge cases.  Some people have suggested adding $1 in interest income.  My interest income is already non-zero and $1 would not come close to making the aggregate of these lines be greater than the tax withheld on the 1040.  My tax situation has been the same for more than 12 years now and last year was the first year to run into this garbage.  I've always e-filed just fine. I don't have much confidence but I hope TurboTax will put this in front of a developer. Calling support was useless. The rep just said she would note it in my file and maybe they would look at it later in the year for next year's tax products.

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Your Federal Return Is Not Eligible for Electronic Filing

Why?
Electronic filing identifies tax situations in your federal return that could preclude you from filing electronically. Your federal return is not eligible for electronic filing due to the following reason:

The tax withheld of $[redacted] as shown on Form 1040 is greater than or equal to $[redacted but smaller than first amount], the sum of income from the following sources:

- Form 1040, line 1z – Wages, Salaries and Tips Amount ($[redacted total wages])
- Form 1040, line 2b – Taxable Interest ($[redacted small amount but above zero])
- Form 1040, line 3b – Total Ordinary Dividends ($[redacted])
- Form 1040, line 4b – IRA taxable amount ($[redacted])
- Form 1040, line 5b – Pensions and annuities taxable amount ($[redacted])
- Form 1040, line 6a – Social Security Benefits ($[redacted])
- Schedule 1, line 7 – Unemployment Compensation ($[redacted])
- Schedule 1, line 9 – Total Other Income Amount (–$[redacted high negative amount for FEIE])
- Schedule C, line 1g – Gross Receipts ($[redacted])

These rules are set by the Internal Revenue Service Electronic Tax Administration.

To file your federal taxes by mail, select “File a Traditional Paper Return.”

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[objecttothis · Accepted solution]

The solution provided by @SusanY1 in https://ttlc.intuit.com/community/taxes/discussion/re-can-t-e-file-due-to-foreign-earned-income-excl... resolved the issue. To me this further points to an error in the validation by TurboTax, not, as @SusanY1 insists, an IRS e-filing rule.  The difference between taxes withheld and the aggregate of the lines TurboTax is calculating is far more than $1 that the capital gains income adds, so it's not like adding this suddenly made the tax withheld less than the sum of those lines. A workaround that requires adding capital gains that don't exist is not a good solution. Next year I will just use the IRS fillable forms tools or another product.

To add $1 of capital gain follow these steps:

Navigate to 

1. Click Start beside Stocks, Cryptocurrency, Mutual Funds, Bonds, Other
2. Click Add Investment
3. Click Skip Import
4. Select Other
5. On the screen Tell us more about this sale enter anything you'd like in the Name box. "Workaround" is fine.
6. Click Continue
7. For type of investment again choose Other for how you received the investment answer Purchased.  Description can again be "workaround".  For ease of entry for dates use One one date and 01/01/2024 for purchase and 12/31/2025 for sale.   Enter proceeds of $2 and cost or other basis of $1 and click continue again.  On the following screen check "None of these apply" and then continue one last time.
8. Next, navigate to federal review and attempt to efile your return again.