Question

Turbo tax incorrectly calculates Alabama state tax when non-taxable federal income shows NO state taxable income, TT STILL adds it to state form 40 W-@ worksheet as "OS".

Forum|Forum|3 years ago
February 7, 2023
2 replies
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The W-2 is blank in the boxes 15 thru 20 as this is non-taxable income in AL. HOWEVER, TT add this to AL Form 40 pg 1, line 5 totals which fails to reconcile with the W-2s, triggering an error upon e-filing. TT "assumes" this as another state, which it is not.

TurboTax Deluxe Online

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ThomasM125

It may be that you are filing a resident tax return, in which case your wage income is going to be taxable in Alabama, even if it is not listed as such on the W-2 form. You would pay tax in Alabama on all your income earned, even if from work out of state, if you are a resident of Alabama. You may be entitled to a credit for taxes paid in another state, but your income would still be taxable in the state you reside in.

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J

jim.summerlinAuthor

Please read the statement before responding, as you did not understand that the income is NON-TAXABLE under state law. Therefore, it SHOULD NOT be included!!! Please also understand that this has been confirmed with Federal and State agencies; it is Turbo Tax that is calculating this income incorrectly and mistakenly automatically adding it to column J of Schedule W-2 of AL Form 40. This should have been properly code with a questionnaire to exempt this addition from this schedule due to the special circumstance, but Turbo Tax failed to properly provide for this part of the state tax code in their product.

Note that this can be overridden in the desktop version, but not in the online version, to make the CORRECT adjustment. Turbo Tax still refuses to refund or credit me back the payments in order to purchase the desktop version. So basically, I was charged for an inferior product that Intuit and Turbo Tax will not stand behind. They could simply correct their programming with the "lessons learned" information, but instead choose to save money on upgrades and ostracize Federal workers to which this condition applies.

This is the second year in a row TurboTax has gypped me out of the state tax product and forced me to file manually by paper. I have learned my lesson. Turbo Tax never again!!!

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tedthegreat

https://www.revenue.alabama.gov/wp-content/uploads/2023/01/22schw2instr.pdf

Alabama wants you to put on your FORM 40 W-2 Schedule only for the Alabama schedule, AL to state states paid to Alabama, and OS for anything paid not to Alabama.

Turbo tax experts, please do not respond like you did to this guy that started this thread with erroneous information, that is not helpful, harms your customers and shows a callous attitude of disregard. If you are not an expert, and faking it, you should not be answering anything on this website.

SusanY1

To help us understand better how to help you navigate the program to include these nontaxable wages can you tell us more about them? Certain types of income do require special handling in TurboTax to be properly treated. What is the nature of the income that makes it nontaxable in Alabama? You mention federal work - is it a certain class of workers, certain occupations, or something else? I haven't been able to find the information needed to help guide you on my own, but I suspect that is because I don't know exactly what I am looking for.

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