How To Use Pro System Fx Tax (Saas) (Sasaas)

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1 ProSystem fx Tax (SaaS) Release Notes February 2013 Contact and Support Information 2 Technology Updates 3 Electronic Filing 3 Batch Electronic Filing of Extensions 3 Product Updates 4 Individual (1040) Product Updates 4 Partnership (1065) Product Updates 8 Corporation (1120) Product Updates 11 S Corporation (1120S) Product Updates 13 Fiduciary (1041) Product Updates 16 Issues Addressed 17 Batch Manager 17 Correspondence Manager 17 Import/Export 17 Contents 1

2 Contact and Support Information Return to Table of Contents. You can find product and account information by visiting Customer Support online at In addition to product and account information, the Customer Support site offers answers to our most frequently asked questions, forms release status, training videos, and Windows compatibility with each ProSystem fx product area. The following Web site provides important information about the features and updates included in all ProSystem fx Tax (SaaS) releases: Visit the Web page to view the current status of our SaaS applications. The Application Status Web page is updated every 15 minutes. You may visit at any time, even when Support is closed. Go to Support.CCH.com/Contact to find a list of options for contacting Customer Support. This site also includes a link to the ProSystem fx Suite Support Calendar. Contact and Support Information 2

3 Technology Updates Return to Table of Contents. Electronic Filing You can currently upload and release qualified returns for transmission. We will continue to disqualify returns containing forms on the IRS delay list until the IRS provides their revisions to the electronic filing specifications. You can review this list on the following IRS Web site: Form 4562 is on the delayed list above, but the IRS began processing returns with these forms on Sunday, February 10, The IRS previously announced delayed processing of Form 8863, but began processing returns with these forms on Thursday, February 14, In addition to those previously announced, the following state products are approved and available for electronic filing submission as noted above: Individual Arizona, Texas, Texas extension Corporation, S Corporation, and Partnership Georgia, Texas, Texas extension Fiduciary Massachusetts Batch Electronic Filing of Extensions Batch electronic filing of extensions is available on this release for the following taxing authorities: Individual Federal, Louisiana, Massachusetts, New Jersey, New York, New York City You can file these returns individually or in groups using these combinations: Federal only Federal and state State only Multi-state with Federal Multi-state without Federal To access this feature, go to Dashboard > Applications > Batch Manager > New Job > Electronic Filing > Extensions and select the returns to process. Technology Updates 3

4 Product Updates Individual (1040) Product Updates Return to Table of Contents. Federal Form The reduction in the foreign taxes denominator calculation uses the self-employed tax deductions, self-employed health insurance deductions, and Keogh deductions that have been allocated based on foreign self-employment income to worldwide self-employment income. Form A disqualifying diagnostic is issued when a government view override other than "2012" is entered in the "Tax Year the Decedent was Due a Refund" field. Form Disqualifying diagnostic will not issue for a second qualifying dependent with zero expenses. Form The form does not print if Line 8 equals 0 and the form is not required to be filed. Form Disqualifying diagnostic will issue when vehicle information entered for Form 8283, page 1 but neither the contemporaneous written acknowledgment nor the contributions of motor vehicles, boats and airplanes input has not been entered. Form Disqualifying diagnostic issues for missing spouse information. Electronic Filing Form When disqualifying diagnostic is present, the return will not export. Form Disqualifying diagnostics and issue for Form 8863, page 2 missing address information and for the educational federal identification number. Form Page 2 does not print if Lines 30 and 31 are blank. Preparer's street address. The preparer's street address is limited to 35 characters per IRS specifications. This change prevents reject code IND-055. Schedule A. Disqualifying diagnostic issues for adjusted gross income greater than the threshold allowed for Line 13. Schedule C-EZ. Disqualifying diagnostic issues when a zero is present on Lines 1 through 3. Arkansas Electronic Filing Disqualifying diagnostic issues if a code is present on Itemized Deductions (Schedule A) > Contributions > Other Contributions > Code field (Interview Form A-5, Box 59) and no description or amount is entered in the Description or Amount fields (Boxes 58 and 60) for that record. California Schedule W-2, Line 14 description populates when a description of "CA SDI" is entered. Taxable Roth conversion amounts from 2010 are subtracted from California income on Schedule CA, Line 15, Column B. Product Updates 4

5 California Electronic Filing Disqualifying diagnostic issues when the care provider's first name is not entered for Form Disqualifying diagnostic issues to prevent a schema validation error when two direct deposit accounts are present on Form 540, but one of the amounts is zero. Colorado Diagnostic no longer produces when the appropriate PDF code is entered for the Enterprise Zone calculation Form 104CR. Georgia Line 14 of the retirement exclusion worksheet is blank when the amount is less than zero. Illinois Form IL-4562, Line 3 no longer includes assets that were not disposed of in the current year in the depreciation add back. IL Schedule CR, Line 29, Column B, other subtractions has been limited to the greater of the calculated amount or zero. Indiana Interview Form IN12 and IN13 will open the respective interview form when double-clicked in split-windows forms tree. Indiana Electronic Filing Form CT-40 and CT-40PNR print regardless of a calculated Indiana county tax liability for any taxpayer that lives or works in an Indiana county that assesses a county income tax. Iowa Depreciation that belongs to spouse on a married filing joint return is included under the taxpayer's IA Iowa only wants spouse specific forms when filing status is married filing separately on a combined return (2 column IA 1040). Disqualifying diagnostic issues when negative numbers are entered for other taxes and other expenses on IA Schedule A. Form IA 1040, page 2 prints preparer's PTIN and FEIN Schedule B includes tax exempt bond interest. Gross amount of dividends appear with tax exempt amount to show net amount that is taxable. Louisiana NPR Worksheet, Line 11 Total Adjustments to Income, Louisiana column includes moving expenses, educator expenses, certain business expenses, health savings account deduction and tuition and fees deduction. Maine Schedule 2, Itemized Deductions, Line 5A, includes state and local taxes from Schedule A, Line 5. Massachusetts Electronic Filing Taxpayers no longer receive MA rejection 122 due to foreign employer address on a W-2. Product Updates 5

6 Michigan Payer name is limited to 28 characters on Form MI-4884, Line 6, Column C, and Form MI Schedule W, Table 1, includes military wages regardless of whether Michigan income tax is withheld. Michigan - Michigan Cities Supporting statements for Form CF-1040 print in all copies. Michigan Electronic Filing Form MI-1040CR, Line 9 no longer displays a value when the homestead includes a service fee or special housing. Form MI-1040CR, Lines 36 and 38 display zero for senior claimants who are not eligible for a property tax credit. Minnesota M1PR Electronic Filing A disqualifying diagnostic issues if the owner's phone number for certificate of rent paid information is less than 10 digits. Mississippi Electronic Filing Form and Form disqualifying diagnostic issues when dependent's name, social security number or relationship is missing. Form and Form disqualifying diagnostic issues when head of household status is selected but the qualifying dependent's name, social security number or relationship is missing. Form , taxpayer's name and social security number fill if the income or withholding is designated to either the taxpayer or the spouse. The payer's foreign identification number for expatriate wages will flow to Form taxpayer or spouse name and social security number automatically fill based on whether the income or withholding is specified to the taxpayer or spouse. Montana Electronic Filing Disqualifying diagnostic issues when the employer identification number is missing. Nebraska Electronic Filing Disqualifying diagnostic issues when tax year ending date is greater than or equal to the current tax year. New York 204LL Electronic Filing Disqualifying diagnostic issues when the taxpayer's street address, city, state, or ZIP is missing. North Carolina Educator expenses deducted on Federal Form 1040 no longer deduct on Form D-400. Tax Equalization for North Carolina, Line 19, includes interest from Form D-400, Line 27c. Product Updates 6

7 Ohio Electronic Filing Ohio Electronic Filing disqualifying diagnostic will not issue when General > Return Options > Processing Options > Combine passthrough income and other expenses on Schedule E, page 2 (Interview Form 2, Box 59) is defined as "yes". Ohio Electronic Filing disqualifying diagnostic will not issue if multiple states and multiple localities have been entered on the IRS-W2 and the state wages that have been entered for each state are greater than the tax withheld for each state. Pennsylvania Form PA-40, Line 1a, does not report amounts multiple times when multiple 1099Rs exist with the Distribution Code of "J". Form REV-677 taxpayer name and SSN field to use spouse name when requested. Letters and filing instructions for PA RCT-101 shows the refund amount less credit to next year. Pennsylvania - Pennsylvania Cities Form CLGS-32-1, Line 5 Scorporation indicator does not get marked when there is no Scorporation income in the return. Form CLGS-32-1 mailing address of PAC jurisdictions must be checked through Diagnostic is issued referring the same. West Virginia Electronic Filing Disqualifying diagnostic now issues if no withholding documents are present in the electronic file. This is typically attributable to income entries on Other Income > Miscellaneous (Interview Form M-1) when an amount for state withholding is present. If income has associated state withholding, it cannot be entered here. Disqualifying diagnostic now issues if required information has been omitted from 1099R input on the IRAs, Pensions and Annuities > Distributions from Pensions, Annuities and IRAs (IRS 1099-R) (Interview Form IRS-1099R) if state withholding is present. Disqualifying diagnostic now issues if required information has been omitted from 1099G input on the Other Income > Certain Government Payments (IRS 1099-G) (Interview Form IRS-1099G). Disqualifying diagnostic now issues if required information has been omitted from 1099INT input on the Interest (Schedule B) > Interest (Schedule B) (Interview Form IRS-1099INT) if state withholding is present. Disqualifying diagnostic now issues if required information has been omitted from paid preparer input in the return configuration set, on the Return Options > Preparer Information - Overrides Office Manager (Interview Form 3) or Electronic Filing > Electronic Return Originator - Overrides (Interview Forms EF-1 and EF-2). Product Updates 7

8 Partnership (1065) Product Updates Return to Table of Contents. Federal Change of partners' interest is updated to correctly reallocate withdrawing partners' percentages, when there is no change in the total percentage for the first period. Entries made in Worksheet > Income / Deductions > 10 - Schedule K - Other tax exempt income and 12 - Schedule K - Nondeductible expenses (Interview Form K-3 with Option Code 2) for Schedule K only are now automatically excluded from Schedule M-3. Form 4562 totals no longer prints when it is not required. The amount entered for AMT Adjustment Gain and Loss for a passthrough is now included on Schedule K-1, Line 17B. The rental property type now exports to 1040 returns. Worksheet Federal > Income/Deductions > Partnership Passthrough, Fiduciary Passthrough and Large Partnership Passthrough now include a field for class code. Alabama Schedule K-1, Line T, now splits out partners' separate items for pensions, health insurance, IRAs and other deduction. Worksheet Federal > Partners > General Options > Schedule K-1 Print Options > Suppress Schedule K-1 statements (Interview Form 5, Box 39) now suppresses all statements on Alabama Schedule K-1's. California Schedule K-1, Line 17b, now includes the state override used in conjunction with activities. Schedule L, Other Investments and Other Liabilities, now include loans to partners / shareholders. Connecticut Electronic Filing Connecticut now attaches a PDF of the federal return along with the electronically filed state return as required by the state. District of Columbia Form FR-128 extended due date is updated for fiscal year returns. Idaho Form 65, Page 2, Line 39, now includes all income for resident partners. Input is now available for Form 55, Page 2, Line 28a, on Worksheet Idaho > Credits and Recapture > Idaho Credits > Live organ donation expenses (Interview Form ID8, Box 55). Indiana Forms WH-18 now collate in the K-1 print package appropriately. Product Updates 8

9 Iowa Electronic Filing Form 1065 returns have been rejected for reject code X This may be due to contact name and phone number being required, if one is entered both are required. A diagnostic is now issued for this situation. Massachusetts Diagnostic now only issues for ineligible partners on the composite return. Michigan The apportionment ratio on Form 4918, Page 1, Line 6c, will now properly calculate when Michigan sales and Total sales are entered on worksheet Michigan > Flow-Through Withholding, or Interview Form FTW1, Boxes 42 and 43. The partner's guaranteed payment on Schedule K-1 Equivalent, Line 2(i), will now reflect the correct amount for the partner. Michigan - Battle Creek Battle Creek third party designee information now comes from input on Worksheet Michigan > Cities > Battle Creek > General > Third-Party Designee (Interview Form DTW3, Boxes 60 through 63). Special allocation codes 61303, and now specially allocate the appropriate amounts. Mississippi Form now uses Office Manager entries for basis for accounting. Nebraska Worksheet Federal > Partners > Partner Information > Nebraska is now accessible. New Jersey Form PART-200-T and Worksheet filing fee is now limited to a $250,000 maximum. North Carolina The amount of "Partner's share of tax withheld" entered on Worksheet North Carolina > Payments/Penalties > Tax Payments no longer clears when the return is calculated. North Dakota Schedule FACT is updated so that Lines 1-13 are completed anytime there is a partner present that is not an individual, trust, grantor trust, or estate. Further, for any lines or columns that do not have an apportionment factor entered elsewhere, the appropriate data is used from the federal return to calculate the 100% apportionment factor. There is new input present with the state apportionment overrides to suppress this treatment and make Lines 1-13 blank. Ohio The Preparer Electronic Signature now prints instead of the Firm Name in the signature block when requested. Pennsylvania Form REV-798 now prints when Form RCT-101, Page 5, Section F, Question 1, is answered "Yes". Product Updates 9

10 Pennsylvania Electronic Filing Diagnostic is added to ensure a valid Revenue ID code when one is entered which effects the electronic filing of the REV-853 extension. Product Updates 10

11 Corporation (1120) Product Updates Return to Table of Contents. Federal DISC-6 input can now be attached to DISC-5. The folder for the 1120 in tree view now activates when the calculation history is suppressed. Alaska Change to taxable income entered under Federal > Payments/Penalties > Estimates and Application of Overpayment > Change in taxable income or Federal Interview Form STEST-1, Box 43, will now be used in calculations of next year's estimates even when current year income is -0-. California An option to suppress the printing of the signing officer's address on Form 100/100W, Page 2, has been added to General Information > Basic Data > Leave signing officer's l address blank (Interview Form CA1, Box 57). New input is available at Common State > State/City Common Data > Account Information > Other Form ( GEN-1, box 41) to enter the CA Secretary of State File Number. Connecticut Form CT-1120RDC, Part III, Line 17, Column F, is now correctly calculated by subtracting columns D and E from column C. Consolidation The statement for like-kind Section 1.168(i)-6(i) transactions on Form 4562 is now produced for consolidated returns. This fixes the issue of the Form 4562 Section 1.168(i)-6(i) statement in regards to like-kind exchanges not being produced at the consolidated level. District of Columbia The District of Columbia D-20 and D-20AG have been updated to show the Designated Agent return name that is entered on the parent return in a combined unitary. Georgia Form PT-440, Page 2, Business License Tax Return, will now allow 4 decimals to be entered for the city or county tax rate. Indiana Form DB020W-NR will no longer produce or print in returns, the form is no longer in use by the state. Form IT-20 PTIN field has been revised to only populate with PTIN number even when a EIN or SSN is present in the return. Iowa The Iowa 4562A, columns G and J have been updated to include Section 179 in their totals. The total from Part III that goes to the IA 1120S remains unchanged as it was including Section 179 in its total. Product Updates 11

12 Kansas A new Interview Form KS18 has been added and under the worksheet Income/Deductions the new section Expensing Deduction Schedule has been added. This is for use with Form KS-120EX when depreciation totals are used. Each current year asset which qualifies for the expensing deduction can be entered for use by the K-120EX. Form 130AS, Part V, Total Company, End of Year column will now use the End of Year amount of the "Value of taxpayer's loans and credit card receivables", in the calculation for the "Total property to be averaged" line. Previously the calculation included the Beginning of Year amount instead of the End of Year amount for the calculation. Massachusetts The revised Form 355Q dated 1/13 is now available. Only cosmetic changes were made. Michigan The Corporate Income Tax return (CIT) will no longer be turned off when the option to suppress Michigan Business Tax (MBT) has been used, and Diagnostic will no longer be issued if the CIT return is being filed. Mississippi Electronic Filing Disqualifying diagnostic will now issue when Form , Line 3, is negative. New Jersey - Electronic Filing Electronic filing for New Jersey corporations and s corporations is currently being developed. Initially diagnostics were being issued with respect to New Jersey business rules even though the product was not complete under the assumption that the program would be available early in At this time, New Jersey has not posted test cases required in the approval process so these diagnostics will no longer be issued. New York Preparers will now be able to enter NY temporary ID number for Form IT-204-LL purposes when entity EIN has not yet been obtained. Pennsylvania Form REV-798 Schedule X, and related general questions on Form RCT-101, Page 5, have been revised to calculate according to the Schedule X instructions regarding majority ownership. Additionally, overrides have been made available on PA- General Worksheet, Corporate Officers section (Interview form PA -13) for the last section on the Schedule X. Utah Electronic Filing Added disqualifying diagnostic to prevent reject when Schedule A, Line 13 has an amount other than zero and Form TC-20, Page 1, Line 1, is not checked. Wisconsin Combined returns with a pre-2009 net business loss carry forwards and have used a portion of their total net business loss carry forward amount between tax years 2009 and 2011 have been revised. The amount of nonsharable pre-2009 net business loss used will be deducted to arrive at the amount remaining as of the beginning of the 2012 taxable year. Product Updates 12

13 S Corporation (1120S) Product Updates Return to Table of Contents. Federal Form 4562 totals prints when it is not required but is forced on General > Depreciation Options and Overrides > Section Depreciation Options and Overrides (Interview Form DP-9, Box 37). The two most recent calculations on the Calculation History report are now saved and displayed for all returns. Electronic Filing Diagnostic will now issue to prevent a schema validation error on Form 1120S, Sch B, when required input is missing for the entity name. Alaska Form 708, Line 1 will now be computed in accordance with the new state instructions that take into consideration refundable credits. Current year income tax now will be reduced by the current year refundable credits. Arizona Form 338 (K1-NR) has been revised to always print when the form is present in the return. California An option to suppress the printing of the signing officer's address on Form 100/100W, Page 2, has been added to General Information > Basic Data > Leave signing officer's l address blank (Interview Form CA1, Box 57). New input is available at Common State > State/City Common Data > Account Information > Other Form ( GEN-1, box 41) to enter the CA Secretary of State File Number. Connecticut Federal statements do not print behind CT Schedule K-1 any longer. Connecticut Electronic Filing Connecticut Transmittal has been updated to indicate that you are not required to file Form CT K-1T and paper copies of schedule CT K-1 with department of revenue services when Connecticut is being electronically filed. However, Schedule CT K-1 is still required to be issued to the members District of Columbia The District of Columbia Estimate vouchers have been updated to reflect the change to 110% in safe harbor for estimates dated after 12/31/11. Idaho Idaho Form ID 41S Lines 40-42, have been revised to have the option to be calculated based off codes on PTE-12. Product Updates 13

14 Illinois Schedule B, Shareholders Identification, and Schedule K-1-P, Shareholders Share of Income, Deductions, Credits & Recapture, will now correctly report the shareholder's share of pass-through entity payment calculated on Form IL-1000, Pass-through Entity Payment Income Tax Return, when a Form IL-1023-C, Composite Return is also present. Indiana Form IT-20s PTIN field has been revised to only populate with PTIN number even when a EIN or SSN is present in the return. Iowa The Federal Schedule K-1s have been added to the Government Copy of the printout of the Iowa S- corporation return. Kansas A new Interview Form KS18 has been added and in worksheet view under Income/Deductions the new section Expensing Deduction Schedule has been added. This is for use with Form KS-120EX when depreciation totals are used. Each current year asset which qualifies for the expensing deduction can be entered for use by the K-120EX. Form K-120EX, K-1 copy will print out with the tax return. Form K-40 check box on Page 1 will now mark the Single box instead of the MFJ box for the nonresident composite form. Maine Form 941P-ME Schedule 3P now allows for shareholders to be listed on the form when a loss is indicated for the entity on 941P-ME Page 1, Line 5. Maryland Electronic Filing Disqualifying diagnostic will now issue when the preparer address is missing or incomplete for extensions. Minnesota Form M8 and Schedule KS. The last 4 digits of the Social Security Number or EIN will not be masked when this option is chosen in the return configuration set Print Options. Missouri When the option to suppress the Missouri Schedule K-1 is elected before the Missouri Schedule K-1 is produced, the Missouri 1120S, Page 2, Column 5, has been revised to bring over the shareholder's addition/subtraction adjustment. New Jersey The installment payment method has been enabled for corporations with total tax liability of $500 or less. To allocate the override amount for Other AAA reductions to New Jersey resident shareholders. Ohio Form IT 1140, Page 6, the state abbreviation code for the additional shareholders will now print correctly. Product Updates 14

15 Pennsylvania PA Rev-857 Estimated Tax Worksheet has been updated to reflect 100% of current year tax base calculated at current year tax rate. The ERO's EFIN on the 8879-C page 2 has been updated to populate from data entered in the return configuration set, or on the General - Electronic Filing worksheet, Electronic Return Originator- Override section (Interview Form EF-2). Pennsylvanua - Electronic Filing Diagnostic number had been revised to no longer issue when overrides for the Schedule D are not present in the return. Vermont An option has been added to combine all composite filers onto a single K-1VT. This option is on the VT General Section or Interview Form VT-1, Box 50. Wisconsin Estates and trusts using social security numbers as the identifying number will be formatted ### ## ####. Product Updates 15

16 Fiduciary (1041) Product Updates Return to Table of Contents. Federal A phone number is no longer required to efile Form 7004 when a payment is not included with the extension. Form 7004 will print upon export when extensions are selected for electronic filing. Schedule D continuation sheets will now print the grantor's copy. On Schedule I, if the Taxes > Alternative Minimum Tax use the ordinary income percent to allocate alternative minimum taxable income field (Interview Form T-4, box 70) is NOT checked, the return is final, and Schedule B, Line 9, is 0, then Schedule B, Line 9, will carry to Schedule I, Line 38. The Schedule K-1 distributions will be correct now when there is a final year estate and capital gains are used for a charity deduction. The service center where filed will now print correctly. Electronic Filing Diagnostic 49148, Electronic Filing. Return Disqualified. If form 1041, Page 1, Line 18 (income distribution deduction schedule B) has an entry, then it must be equal to schedule B, Line 15 (income distribution deduction), EXCEPT when ("section 642(i) trust") or (#Pooled Income Fund) is present. (IRS Rejection Code 652)" will no longer issue if the return is a Section 642(i) trust. Colorado Form 105, Page 2, Schedule C, Line 7, Colorado column will now include income from sale of 1250 property when "CO" is entered as the state code. Georgia Amended box on Schedule K-1 will only fill if form 501X is prepared. Illinois Corrected printing of IL Schedule K-1, Line 12b when total income is 0. Massachusetts The calculation to exclude MA differences from gains or losses on Form 2G, Line 10, has been corrected. The line references to the individual system for the Grantor and Tax Information letters has been updated. Product Updates 16

17 Issues Addressed Return to Table of Contents. Issues identified for the following ProSystem fx Suite products and modules were resolved and included in release Batch Manager Batch printing returns no longer causes an Authorizations could not be created error. (57888) Correspondence Manager Import/Export An extra line is no longer entered between paragraphs when editing a custom letter inside a return. (57565) Reviewing custom letters inside a return that have edited paragraph numbering no longer causes a No information was prepared error. (58731) Worksheet rental income input is correctly populated in Form (56868) Note: Organizer forms could experience font related problems when some print drivers are used. When printing Organizers to an HP Laserjet 9000 or 9050, we recommend using a PCL6 printer driver to prevent font-related issues. This print issue will be addressed in a future release. (14642) Issues Addressed 17