Update on state adoption of extender legislation:

Illinois

Adopting the extender legislation

Iowa

Iowa will not conform with any of the extenders listed below for tax year 2017, or any future year, unless the legislature acts to do so. Iowa also did not conform with any of the three extenders listed for tax year 2016, and the department already has some guidance on the effects of non-conformity with these specific provisions available on our website.

Sec. 40201.  Extension of exclusion from gross income of discharge of qualified principal residence indebtedness.

Sec. 40202.  Extension of mortgage insurance premiums treated as qualified residence interest.

Sec. 40203.  Extension of above-the-line deduction for qualified tuition and related expenses.

Minnesota

Minnesota has not adopted these federal changes.

Kentucky

Adopting the extender legislation

Montana

Adopting the extender legislation

Oregon (Updated 3/6)

As you may already know, the 2018 session of the Oregon Legislative Assembly has ended. The legislature didn’t disconnect from the federal extenders in the “Bipartisan Budget Act of 2018” (HR 1892, Public Law 115-123). For the 2017 tax year, Oregon taxpayers may claim the Oregon tuition and fees deduction (subtraction code 308) if they claimed the federal American Opportunity or Lifetime Learning credit. Taxpayers are also allowed to claim the itemized deduction for mortgage insurance premiums, and may exclude discharged debt on their principal residence from their taxable income. Use the ‘Reserved’ element (line 13) to claim the mortgage insurance premium on the Oregon Only Schedule A.

If taxpayers filed a return that claimed the tuition and fees deduction or subtraction, or the mortgage insurance premium itemized deduction, and their return was adjusted in processing, we will automatically re-adjust the return. There is no need to file an amended return unless the taxpayer chose to file without including these items and now wants to claim them.

South Caroline (Updated 3/14)

The South Carolina Department of Revenue (SCDOR) is providing an update to individuals, tax preparers, and tax software companies regarding the federal tax provisions recently renewed for tax year 2017.

South Carolina has not yet adopted the federal tax provisions that were retroactively renewed for tax year 2017 in the Bipartisan Budget Act of 2018 (enacted February 9, 2018). Legislative action is needed before these provisions can be claimed on 2017 South Carolina income tax returns.

Federal tax provisions available for 2017 federal tax returns that have not been enacted by South Carolina include:

1.   Exclusion from gross income of discharge of qualified principal residence indebtedness (often, foreclosure-related debt forgiveness), claimed on Form 982.
2.   Mortgage insurance premiums treated as qualified residence interest, claimed on Schedule A.
3.   Deduction for qualified tuition and related expenses claimed on Form 8917.
4.   Deduction for out-of-pocket medical expenses that exceed 7.5% of adjusted gross income (rather than 10%).

Taxpayers in the process of completing 2017 South Carolina income tax returns have several options while awaiting legislative action:

1.   Postpone filing your tax return until closer to the filing deadline. This may avoid the possibility of needing to file an amended return later. The 2017 South Carolina Individual Income Tax returns are due April 17, 2018. Taxpayers filing electronically have until May 1 to file and pay the balance due without penalty.
2.   File your South Carolina tax return now based on current South Carolina law and make adjustments on your South Carolina return for the federal provisions that South Carolina has not yet adopted. You can amend your South Carolina tax return later to claim one of the renewed tax benefits if South Carolina adopts the provision during the legislative session.
3.   Extend your South Carolina tax return and wait until the end of the South Carolina legislative session to file. This may avoid the possibility of needing to file an amended return later. Extended 2017 South Carolina Individual Income Tax returns are due by October 15, 2018.

Wisconsin

Tuition and fees has never been allowed and discharge of indebtedness on principal residence is added back.  WI will be releasing new schemas soon

Updated 2/21

The first set of extenders that will be rolled out is for:

• Tuition and Fees
• PMI

The IRS is still working to release updated forms and instructions for the other items.

Important Note: 

Due to the recent passing of the Bipartisan Budget Act of 2018, certain expired federal provisions have been reinstated such as the Tuition and Fees deduction and the Mortgage Insurance premiums deduction. Each individual state will determine if and when they will conform with those federal changes.  If you file a state return prior to the state making their decision to conform or not you may be required to file an amended return.”

TaxSlayer recommendation:  Once we deliver these two items, we recommend that you create a return tag if the return has one of these two items in it and a state return.  As of today, we do not know if the state(s) are going to adopt the extenders.  Once your state makes a decision, you can run a “Tags report” and review the state returns to see if any adjustments need to be made.

~~~~~ Original Blog Post ~~~~~

We are in the process of implementing the once expired extenders into the application.  We are planning to release these in the next few days.  As we get closer to a release, we will keep this blog post updated.

Blog posted 02/20/2018

The Augusta Chronicle Published a News Article on the Front Page Thursday February 8, 2018 about the AARP Volunteer tax help.

Click here to read full article

Thank you John F for sharing this with us.

We would love to hear your site stories and share them with the VITA/TCE community.  It doesn’t have to be a news article, just tell us about your site and how you make a difference in the community.

Scenario:  The following Ohio locality forms are not loading the menus

• RITA — update 2/21 — working as expected
• City of Columbus — update 2/21 — all menu items display except “Overpayment Credited”
• City of CCA– update 2/21 — working as expected

The following locality MO forms are not loading the menus

• RD-108 KC Profits
• RD-109 KC Wage Return
• E-1 St Louis Wage Return

If you get stuck loading the menu, you will need to select the bottom Save and Exit on the left navigation panel.  This will exit the return and you will have to re-open the return.

Solution:  We will resolve this in an update

Resolved

~~~~ Original Blog Post ~~~

Scenario:  You are receiving an error when trying to move to the e-file section if you have CA Form 3532 (HOH).

You can go ahead and file the Federal return

Tag the return with a return stage so you know to go back and file the state return

Solution:  We will correct this in an update.

We received the following message from Massachusetts

If you received reject F1-1025 or FNRPY-1025, when choosing the optional tax rate and were rejected.

Please resubmit the returns after 9 p.m. (EST) this evening (Friday, February 16th)

Blog posted 02/16/2018  3:20 pm EST

2/27/18

We are still investigating why some M1PR’s do not have an acknowledgement. NO ACTION is required on your side at this time.

2/16/18

We currently have 54 M1PR returns sent between 2/10 and 2/14 that do not have an acknowledgement.  We are researching these.

NO ACTION is required on your side.

Blog Posted 02/16/2018  12:58 pm EST

If your 2016 returns were rejected for IND-202, you can now resend them.

~~~~~ Original Blog Post ~~~~~

Scenario:  I am a new site using TaxSlayer Pro Online for the first year.  I electronically filed a 2016 return and received the following reject from the IRS IND-202

Why:  Your site did not automatically create a 2016 row in our system which prevented the return from going through the Vendor Control process

Solution:  We are working to get the site information into our 2016 system.  Once that occurs, you will be able to resend the rejected returns.  Issue ID 1020

blog posted 02/07/2018

Below are some questions and answers asked on the call that may be beneficial for all sites:

When will the new extenders be implemented in the software?

The IRS is working to release updated forms, updated instructions, and updated e-file schemas to all software vendors.  Once these are released, we will start the implementation process.

What does it mean that the extenders are retro-active?

Once the updated information is in the software, to add back items such as the Tuition and Fees deduction and PMI as part of itemized deductions, if this would have benefited the taxpayer, their original TY2017 return can be amended.  This is most likely something that you will receive guidance on once the extender instructions have been finalized and implemented into the application.

Why doesn’t the date of birth entries allow for people with a February 29th (leap year) birthday?

We recommend that you select the Year first, then February 29^th will be available if a leap year is selected from the Year drop-down.

I don’t have the option to deactivate a return on Client List

The ability to deactivate a return is governed by the security template assigned to the user.  If the user has the appropriate security template, the option to deactivate returns will be available under tools for returns with the following status

• In Progress
• Review Failed

You cannot delete returns in any other status.

How can I change a “Complete” return to “In Progress”?

Must have a security template that supports the ability to change “Complete” to “In Progress”. If you have this type of security template, changing the status is done on the Submission Page of e-file.

Why does the Site Production Summary Report contain information for rejected returns?

It no longer does, this change was made and deployed.  It now only reflects totals based on accepted returns.

Will you be changing the other reports to reflect only accepted returns?

We can look at them, but since the other reports have details per taxpayer, the sites can manipulate the data to only show the information they need.  We tried to make them very flexible.