SERIOUS problem with TaxCut for military

[WM]

Any military members out there - check carefully before you use TaxCut - they have a serious error in the program for Ohio residents and it makes me wonder what else is wrong.

DH is an OH resident, active duty, stationed in CO all year. According to OH rules (new for 2007+) he doesn't have to pay state tax on his military income. I saw this in their booklet and called to confirm I was reading it right. Which is fantastic news - we're entitled to a refund of all the OH tax that was witheld for the year!

Well, I only found that out because I was looking through the OH tax booklet for something else - TaxCut specifically says on the opening pages for OH that military members have to pay taxes on all their income, even if they weren't in the state. Essentially, they somehow missed the rule change. I called them and walked through the program with a tech who tried hard but couldn't find a way to make the program work right. And his response was, "well, I guess we'll have to make a note of that for next year." What about everyone who's going to overpay THIS year?!

I was using TaxCut because we get free access through Military OneSource, and I called them to complain, called H&R Block to complain, and have one more number to call.

Needless to say, check carefully if you're using this program!

 

[gindie]

For a future alternative, Ohio has an internet filing site called I-file. It's at:

https://www.tax.state.oh.us/PROD/IFileWeb/

Used it for about 4 years. Easy and does all the math and stuff for you.

 

[OAG]

Yes, the OHIO I file procedures really negate EVER BUYING a program to do the OHIO personal tax returns. Another change, that you would not care about now, is the fact that if he returns to Ohio after he retires his RETIRED PAY is now taxed by OHIO - that little change is effective the first of THIS year.

 

[deserat]

I use Taxcut for fedreal only and then do my state return by hand - my husband is active duty - I'm Reserve - he claims MI, we live in CA and I must claim CA - all of his income is exempted from CA taxes. The military situation can be a very complex one, so checking on the different tax laws is important.

 

[Nords]

What about everyone who's going to overpay THIS year?!

I can't recall any state or company ever worrying about their clients overpaying them...

And I'm sure the TaxCut employee was all over that "note"!

 

[clifp]

The folks at TaxCut better release a new version PDQ. Obviously military folks without access to the internet or who file before the new version is out are screwed. That is a really pity, but I have to say part of my reason for switching back to TurboTax after using TaxCut for several years was a nagging feeling that they H&R block guys weren't as on top of things as the turbo tax folks.

 

[OAG]

Even if they find out late (and I really hope that they do - maybe Tax Cut could send everyone that paid for the program a notice, since they probably could not determine who was military) the can file amended returns. Tax Act should also offer to help with all of the amended returns that would be required - like a coupon for a FREE copy next year. Hope, the Military Organizations pick up on it and get the word out.

 

[samclem]

. . . is the fact that if he returns to Ohio after he retires his RETIRED PAY is now taxed by OHIO - that little change is effective the first of THIS year.

I think you meant "NOT taxed" rather than "now taxed", right? Starting in 2008, military retirement pay is not taxed by the State of Ohio.

From http://tax.ohio.gov/divisions/ohio_individual/individual/military_faqs.stm
(FAQ #10 at bottom )

" For taxable year 2007 and prior years, Ohio residents must pay Ohio income tax on their military retirement income. However, these taxpayers are eligible for a retirement income credit of up to $200, based on the amount of retirement income received during the taxable year (claim the credit on line 48 of Ohio Tax Department form IT-1040).
. . . Effective for taxable years beginning after Dec. 31, 2007, military retired pay of taxpayers who retired from service in the active or reserve components of the U.S. Army, Navy, Air Force, Marine Corps, Coast Guard, or from the National Guard, and SBP benefits, are exempt from state income tax and school district income tax. This pay can be deducted from federal adjusted gross income."

 

[OAG]

Yes I meant "not taxed". Gee how a single letter can change the entire context. I try to edit this stuff but it is early on Sunday morning is my only excuse. To late to edit so I will walk around for a bit with "egg on my face".

 

[WM]

Thanks gindie and RWood for the pointer to Ohio's e-file. I'll definitely use that going forward. And I did notice that they changed it for retired pay also. For a split second, that made me think we should reconsider Ohio as a retirement destination. Nah.

I'd like to say I thought it was helpful to complain to OneSource and H&R, but I really doubt that anything will get done. If I knew of anywhere else to post it, I would. I agree, the least they could do is put a note in for next year alerting people that they can do an amended return, but I somehow doubt they'll do even that.