I used turbotax to file my 2021 taxes in Feb 2022 for my federal and state taxes, listing a refund of over $1,000 for my CA 2021 tax return.
I discovered through the CA Franchise Tax Board website that they believed I owed $2.8k for my 2021 taxes instead of a refund, due on 4/15. I was not notified in any way.
After looking into the issue, it turned out that there was a bug in TurboTax software that caused it to exclude my negative community property adjustments from my Schedule CA. According to the FTB, "Line 27 of my 2021 Schedule CA Form 540 did not match my CA Form 540 line 13.”. This turned out to likely be because TurboTax failed to add my community property adjustments to the "other sources of income" in Schedule CA 540, Section C, 24(z). So, CA FTB went with a higher (and incorrect) adjusted gross income.
Because I had the “Max” benefits, I called TurboTax thinking that surely they would just manually edit it and correct their mistake. However, after some hours with representatives I was told that this was impossible because it was truly a software bug. Together, we tried using the Amend feature, but that too was not possible.
I tried to get a refund for my TurboTax purchase on 4/28, but was denied because I submitted the request a few days after the date limit. This was frustrating, considering that the issue was actually TurboTax’s and I was given no notice of the issue, so of course I could not request a refund in time.
So, to avoid penalties I decided to go ahead and pay the $2.8k to the FTB, and seek help filing an Amendment from a tax specialist. All tax specialists in my area quoted me at about $800. Not wanting to create another issue by attempting to file an amendment myself, I bit the bullet and paid $800 for a tax specialist to review all of my tax documents and draft an amendment.
Then, on 7/14/22 I get an email from TurboTax revealing that, unbeknownst to me, they knew about the issue and had been working with the CA FTB to fix it. The email said “A TurboTax error on Schedule CA in your tax return caused a processing issue for the FTB as your return was being reviewed…The Franchise Tax Board (FTB) will manually adjust your account to ensure that the correct values are transferred from the Schedule CA to the 540 form…The FTB anticipates having accounts corrected by the end of July”.
In other words, not only did I not get a refund to the $307 on TurboTax’s product, not only did I spend countless hours researching and trying to resolve the issue, but I also spent over $800 on an amendment I will likely not use. A simple notice by TurboTax a month ago that they were working on the issue would have prevented me from paying another tax professional to resolve the issue.
I have enjoyed TurboTax's products for years, but users shouldn't have to pay for software bugs. At the very least, they should be notified that there is a bug and that the company is working on it.
Has anyone else had this issue? Have you had luck getting your money back?
