Tax Planner: how Credit entries are treated

BK · December 3

In the Tax Planner, if my final tax liability is zero, I am not able to apply any refundable tax credits.

Example1: I have zero tax liability and my withholding value is also zero. I know I will qualify for a certain tax credit which $500 of it is "refundable". So I entered $500 in the Tax Planner: in the Other Tax Credits > Credits > User Entered field. My expectation was to see a $500 refund, but it remained at zero. (yes I did refresh)

Example2: I have a $200 Refund Due shown in the Tax Planner. I enter the $500 in the Credits field, expecting my Refund Due to become $700. But it remains at $200.

Of course if I have remaining tax due or withholding amount, it will deduct it from that but will not go above it.

I am not expecting Quicken to be a tax program but I thought that was the purpose of the Credits field. In my testing, any value entered in the Credits field is almost treated like a "non-refundable tax credit". Is this by design?

My primary setup is R62.16 and test is R65.17. TIA

BK · December 10

I am hoping that the SuperUsers would comment on this. Thank you.

Jim_Harman · December 12

I have never qualified for a refundable tax credit so I have no experience with this, but a quick test shows that for me, entering different amounts on the Credits line changes the refund or amount due by the same amount.

Perhaps the Tax Planner does not handle the case where a refundable credit reduces your tax to less than zero correctly.

I suggest you create a very simple test file with enough income in the Tax Planner to produce some tax due and see what happens if you enter values on the Credits line.

Note that there are no tax line items that drive the amounts in the Credits section, so you must enter any qualifying credits manually.

markus1957 · December 12

I can confirm the behavior. Since Quicken does not delineate refundable versus non-refundable credits, nor does it offer transaction level detail for credits, this is the typical conservative approach they use in the calculations.

You could offer it a product improvement suggestion but IMO, it is operating as designed given its limited functionality with respect to credits.

BK · December 12

@Jim_Harman , Thank you

Perhaps the Tax Planner does not handle the case where a refundable credit reduces your tax to less than zero correctly.

From my testing I believe that is exactly what's happening. Which is why I wanted to know if anyone is aware if this behavior is by design or a defect. I can see either one, but IMO Quicken should simply apply the entire credit - if I put in $10K, it should apply the whole amount even if my tax liability is less than zero.

I had already created a test file exactly as you suggested with the same odd results. The data I provided in the post are from the test file.

I look forward to other comments anyone might have. Thank you.

BK · December 12

Thank you for the confirmation @markus1957

I will create a product improvement post but I doubt it will get any attention.

BK · December 13

Interesting but unrelated observation: For 10 days this post got about 40 views and no comments even after I tried to bump it. The moment a SuperUser responded the view count went to 80 within hours!

Jim_Harman · December 13

There may be a couple of reasons your initial post got no responses. First it does not say there is a problem, it was originally more like "Has anyone else seen this?" (You have edited the original so I can't remember exactly what it said.)

Also these days there are often about 100 new posts every day. I probably would have responded but I was away from Quicken at the time and I missed both your OP and the bump.

If you make an Idea post for this, I suggest you give it a title like "Tax Planner: support refundable tax credits." Explain what a refundable credit is and give a couple of examples. Explain that the Tax Planner currently supports credits but not refundable ones.

I think it would require Quicken to add a special Refundable Credit line to the Planner because the calculation would have to be different for refundable credits.

Here are some other pending Tax Planner Ideas and bugs. It normally takes about 50 votes for an Idea to be accepted.

https://community.quicken.com/discussion/7859839/add-qualified-dividend-as-option-for-income-div-int-etc-and-income-reinvested-transactions

https://community.quicken.com/discussion/7958677/the-tax-planner-doesn-039-t-use-the-changed-next-instance-for-schedule-reminders

https://community.quicken.com/discussion/7854216/tax-planner-compute-taxable-social-security-income

https://community.quicken.com/discussion/7959250/issues-with-printed-tax-planner-report

BK · December 13

Thank you @Jim_Harman , I will follow your great suggestions and will review the idea posts.

(You have edited the original so I can't remember exactly what it said.)

Just one comment, that I didn't edit the post (you are referring to the Dec 3 vs. Dec 10 date I assume on the OP). I couldn't have cuz we only have 1 day to edit. I added the second comment on Dec 10 however. I believe one of the Mods edited it to my surprise and removed it out of the "unanswered" queue; perhaps it sat there too long. But the content was not changed.

mistertheplague · December 13

Quicken's Tax Planner is useful for getting a ballpark idea throughout the year of where you're headed at tax time, but if you want/need something granular (the impact of refundable credits, e.g.) you'll need a third-party tool. In years where such granularity is needed, I use TurboTax's What If worksheet.

Bearing in mind, of course, that you're limited to the data you have at hand before December 31st. For instance, I never know what QDI will be in our Vanguard taxable brokerage account until they send me our consolidated 1099 sometime in January. But with some research you can make a very good estimate.

BK · December 13

@mistertheplague , I agree with your comments - Thank you. In fact applying a refundable tax credit is a quick math in the head and faster than using any tool or program. I was surprised and curious about the behavior of the Tax Planner in this case; and perhaps looking for a validation to make sure I was not doing something wrong or a misunderstanding.

Edit/Adding: The good news is that a few of us who didn't know or unfamiliar, learned something new.

BK · December 13

By the way everyone, the option to mark your comments as an answer is not available to me. I am satisfied with the comments and thank you.

Boatnmaniac · December 13

By the way everyone, the option to mark your comments as an answer is not available to me

I've noticed this is an issue with Vanilla lately. Some posts can be set up as questions while others cannot. And those that cannot be set up initially as questions cannot later be changed from a discussion to a question.

In order for someone's post to be marked as an answer the original post needs to be set up as a question, not as a discussion. Your original post is set up as a discussion, not a question, so you cannot mark anyone's reply as an answer.

A couple of us have raised a flag on this issue to a Moderator. Hopefully it will get addressed and resolved with Vanilla.

q_lurker · December 14

@Boatnmaniac Oddly, the first response Dec 10 by BK is marked currently as a Rejected answer. May a mod was trying to diagnose something.

Boatnmaniac · December 14

https://community.quicken.com/discussion/comment/20527540#Comment_20527540

Hmmm….I missed that. Odd, indeed. I wonder what happened? Does that mean that the OP was originally entered as a question and then it later changed to a discussion?

BK · December 14

Your original post is set up as a discussion, not a question, so you cannot mark anyone's reply as an answer.

@Boatnmaniac

I did post it as a question! Since I had done that mistake in the past, I 100% made sure to post it as a question.

I know what happened: After 10 days, Mods moved my post out of the "Unanswered" queue. So I decided to put it back in by marking it as not-answered. Within minutes it disappeared again. And that that option was taken away - clearly they changed it from a question to a discussion. I so added a comment to bump it up. I can't explain why the Mods care but whatever, no hard feelings as the objective has been met.

Boatnmaniac · December 15

https://community.quicken.com/discussion/comment/20527595#Comment_20527595

Interesting. I hadn't thought that a question post would be somehow changed to a discussion post. I hope this issue gets fixed soon. This community becomes more valuable to users when they can easily find Answers to questions rather than have to read through entire threads to see if whether or not there was an acceptable answer provided by someone.

Tax Planner: how Credit entries are treated

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