How to Claim Small Employer Auto-Enrollment Credit (Form 8881, Part II) for solo 401k

Forum|Forum|2 years ago
March 18, 2024
3 replies
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I have a solo 401k and am trying to claim the $500 auto-enrollment credit in Part II (NOT the startup costs credit in Part I). Where do you claim this in Turbotax Home & Business? The only option I see is to claim the credit for startup costs (Part I).

TurboTax Home & Biz Windows

CatinaT1

I would go into Forms Mode and pull the form up from there.

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calbear

On a related note/error:

On Home & Business MacOS: On form 8881, entry of $500 entered (not by me) on Part I line 4 that I cannot remove. I am trying to claim for my solo 401k under Part II which I checked.

I can't seem to figure out how to remove the entry on Part I line 4 which appears to be the issue on why my Federal and State returns keep getting rejected. It needs to be 0. I've tried manually going into forms- won't allow. I've tried Easy Steps and trying to go under Self-retirement tab, but it will not allow any changes when clicking update.

Please help Turbo Tax. It's after 3/6/24 when it was purported to be ready. (it's not)

calbear

Click Forms: 8881: scroll down to Part II, Click Auto-Enroll for the $500 tax credit.

PatriciaV

Employee

The default amount on Form 8881 Part I Line 4 is $500. If the amount on Line 3 is greater, then the amount on Line 4 will be increased. If the rest of Part I is left blank, the default number on Line 4 should not affect the e-filing of your return.

If this issue remains, please provide the exact text of the error/reject message you are receiving.

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calbear

@PatriciaV F8881-002-01 - Form 8881, 'PensionPlanStartupCostsCrAmt' must have a non-zero value if an amount is entered.

lac528

Can someone from Intuit or other users give any more solid answer to the situation being asked about in this thread?

There are a number of us who are sole proprietors with no other employees, file our own taxes with Schedule C, and want to claim this auto-enrollment credit for a Solo 401(k) each year over the next few years. We need to be able to fill out just part II of Form 8881 to claim the $500 credit, have that information flow correctly to Form 3800 and then on to the 1040. And then we need all of these forms to be included in our final tax filing and not have the filing rejected.

From reading this thread so far, Intuit has been saying for a while now that this will be made possible, but user responses say it still hasn't been. Some of us are trying to make time-sensitive decisions that depend on whether we'll be able to claim this credit when we do our 2024 taxes or not. And I see others in the thread may still be trying to claim the credit for 2023 taxes.

As people in this thread have tried to make clear to the responders from Intuit, this is not about Part I of Form 8881 which is the Startup Credit, a different credit. This is about those of us not claiming anything on Part I and only claiming Part II, the Small Employer Auto-Enrollment Credit as sole proprietors (not businesses with other employees, not as partnerships, and not as S-Corps).

I would like to know when this will be implemented and with all honesty which versions of TurboTax will allow this. I really wish it would be implemented in the online version. It is frustrating to be able to file the entire rest of the taxes, but not be able to use TurboTax because of a couple forms that need just a number or two filled out and to be included in the return. And it's been difficult trying to make decisions that require the ability to claim this credit while waiting to hear when it will be fully functional.

Any straight answers? Thank you!

gamma3

I'm really interested in this functionality as well. I had to move away from Turbotax for taxes because of this feature lacking. If this were made available in the software I'd happily move our returns back to TT.

calbear

@JotikaT2 @xchens18

There was another SW update that I installed today. Shortly thereafter- same error message appears.

Can anyone at TurboTax assist?

At this point, if it's not getting fixed, I would likely ask TurboTax to refund my CA State $25 eFile fee since it appears that I'm going to have print 170 pages and mail my Federal return in and I won't be able to CA eFile.