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?

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. 

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


Answer

18 people found this helpful

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.

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