PA local earned income return with out-of-state credit

[jklcpa]

I have a PA resident earned income return for a taxpayer that works in DE.  After calculating the excess of out-of-state credit not used on the PA state return that is remaining and available to offset the local tax, the local return's instructions say to multiply the earnings by the local rate as an additional limitation, and that is how I've always done it.  The instructions still have the same wording.

 

What puzzles me is new wording on the input (on Drake's screen) that says to enter the local rate without including the portion for the school district tax.  The notation on that screen is new this year, but the actual form and instructions available from Keystone Collections are still the same as in past years.  Is the additional limitation for the credit really supposed to be limited to only the muni rate without the school tax?

 

The components of the tax for this resident are .750 municipal and .500 school district tax for a total of 1.250%.  Am I really to limit the credit to only .750% now?

 

TIA for any help so that I don't have to call this collection group again tomorrow.  I had to call yesterday because they didn't notice address changes on someone else's 2013 local, and didn't remove the husband who is deceased either.  The woman really seemed put out to have to correct their oversights.

[Terry D EA]

I will be interested to see what others say here. I have one of these coming in tomorrow. Mine will have PA, Del and NC.

[jklcpa]

What brought it to my attention was when I was reviewing the return, the credit was being limited to 1% even though the full rate for the resident of this township is 1.25%, and I thought I might need to override it and correct the rate and that's when I saw the new notation on the input.

 

Either way, it's going to need an override to fix it, whether it turns out to be the full rate or the reduced rate, because as it stands now the return is wrong no matter what the correct answer is.  It's one more that I thought I could finish that is now on hold.

[jklcpa]

Terry, I called Keystone Collection and confirmed that the out-of-state credit should be based on the full rate for this township is 1.25%, as I thought, and to not limit the credit by excluding the portion of that tax rate that is the school district component.

 

I've had 2 frustrating convos with Drake support. First the rep told me a could override the rate globally for that municipality. The rate is correct and no override is needed.

Next, she said Drake monitors rates, and maybe the rate has changed.  Uh no, at the end of March 2015, PA isn't going to be changing the 2014 rates!!!!!!

Then she said that I could override the rate on only that TPs return. The rate shown is correct, only the credit is wrong!

Then she said I could override the credit..  Right, I tried that before I ever called, and overriding the credit deletes their worksheet so that it won't print at all.

Then she said I could override the rate on the credit worksheet.  Nope, doing that cause the incorrect credit to still be shown on the return, and 2 worksheets are created, both wrong!!!!!

Then she said I should send their PA team suggestions to improve next year.. Uh lady, I don't mean to be rude, but I'm trying to get a lousy 2 page form completed that I could have finished by hand in about 2 minutes.  I don't have time to teach your PA programmers or repeat myself for the 3rd or 4 time about these errors.  It worked fine last year, why'd ya have to mess with it????!!!!!

 

So my plan is to override the credit amount to correct the main form and print it out. Then I'll override the worksheet amount and print one worksheet that is correct. Paper file the stupid little form. 

 

Now back to the grind.

[Abby Normal]

ATX screwed up the MD 502CR this year and I've let everyone I can know that they should have left it the &@#( alone because it was perfect in 2013. Programmers waste time 'improving' forms that don't need changing, instead of making real improvements because THEY HAVE NEVER PREPARED TAXES and they don't know what they're doing.