TurboTax still without Oregon update, affecting refunds for state teachers, college tuition payers

Posted by Timothy Mehaffey on Mar 23, 2011 0 comments

TurboTax still without Oregon update, affecting refunds for state teachers, college tuition payers Share close Google Buzz Digg Stumble Upon Fark Email Print Updated at 3:30 p.m. Thursday to reflect date of expected update; TaxACT’s update.

Portland State University junior Maggie Brown is buying books on spring break, so an Oregon tax refund could come in handy right now.
But she’s still waiting for her software provider — Intuit Corp.’s TurboTax — to update its programs to account for changes Oregon legislators made March 8. 
“I’ve used TurboTax the last four, five years,” said Brown, who’s majoring in child and family studies. “It makes me think I’m probably not going to use them next year after this.”
Hundreds of other Oregonians are probably in the same boat.

In December, Congress and President Obama extended a variety of tax breaks covering college tuition as well as out-of-pocket educator costs. But Oregon legislators didn’t make the same changes in state tax law until March 8, leading to a disconnect and potentially higher state tax bill for early filers.

This evening, an Intuit spokeswoman said updates reflecting Oregon’s changes would take effect Saturday morning.

“TurboTax Online will be automatically updated and taxpayers using the CD version of TurboTax should make sure they download any updates before completing their return,” Ashley Kirkendall said via email.

The deductions mostly impact anyone paying up to $4,000 for college tuition and books, as well as elementary and secondary schoolteachers deducting up to $250 in out-of-pocket expenses. It also would allow parents to keep their children on their health plans until they reach age 26 without being taxed on the benefit.
Before lawmakers acted, Oregon taxpayers filing returns were supposed to add the deductions back to their income on their state returns. At least 15,500 individuals did so, Oregon Revenue Department officials said today. Those taxpayers now must file amended returns to lower their state tax bill, department officials say.
Brown expects the change to turn her $160 state tax bill into a $200 refund. Educators might only save $20 by amending their return or waiting to file, given that most taxpayers pay an effective rate of 8 percent.
Tax-prep software providers led Oregon taxpayers to add those deductions back on any returns filed before the Legislature fixed Oregon law, state officials say. 
H&R Block At Home updated its software March 17, spokeswoman Kate O’Neill Rauber said.

UPDATE: 2nd Story Software Inc.’s TaxACT made its changes March 15, spokeswoman Leigh Aragon said Thursday.

But TurboTax, the nation’s leading software provider, hadn’t updated its software. In fact, its website still encourages customers to “file by March 25 (Friday) for a lower price” on federal returns, though it’s unclear whether that discount applied to state returns.

State officials referred software questions to providers. “We don’t control when they make those changes,” department spokeswoman Rosemary Hardin said. “We hope it’s sooner rather than later.” Customers say the company’s customer support center had given conflicting information as to when an update might take place.

Posters on a TurboTax “Live Community” chat room expressed frustration with the delay. “We’re all still waiting for that update,” a user identified as OrCollegeMom, wrote on Tuesday. “The idea of a manual override is appealing. I’m getting pretty frustrated with Turbo Tax and may not use them for our state return next year. What’s taking so long?”
Brown’s low income meant she qualified to file a federal return for free. But she said she paid Intuit $30 to file her state return electronically 30 “and they still don’t have an update.” 
For more on the issue and tips on how to deal with the changes, read It’s Only Money’s column in this Sunday’s Oregonian.
– ; Twitter: @onlymoney

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