UNITED STATES DISTRICT COURT DISTRICT OF

ProSystem fx Tax (SaaS)

2012-3.3/2011-5.7

Release Notes

March 2013

Contents • 1

Contact and Support Information 2

Technology Updates 3

Electronic Filing 3

2011 Electronic Filing 3

Product Updates 4

Individual (1040) Product Updates 4

Partnership (1065) Product Updates 10

Corporation (1120) Product Updates 12

S Corporation (1120S) Product Updates 16

Fiduciary (1041) Product Updates 21

Exempt Organization (990) Product Updates 23

Upcoming Releases 24

Individual (1040) Product Updates 24

S Corporation (1120S) Product Updates 24

Fiduciary (1041) Product Updates 24

Contact and Support InformationReturn to Table of Contents.

You can find product and account information by visiting Customer Support online athttp://Support.CCH.com/Suite. In addition to product and account information, the Customer Support siteoffers answers to our most frequently asked questions, forms release status, training videos, and Windowscompatibility with each ProSystem fx product area.

The following Web site provides important information about the features and updates included in allProSystem fx Tax (SaaS) releases:

http://Support.CCH.com/Suite/ReleaseNotes/Tax

Visit the http://Support.CCH.com/Notes/appStatus.aspx?type=SaaS&prodid=934 Web page to view thecurrent status of our SaaS applications. The Application Status Web page is updated every 15 minutes. Youmay visit at any time, even when Support is closed.

Go to Support.CCH.com/Contact to find a list of options for contacting Customer Support. This site alsoincludes a link to the ProSystem fx Suite Support Calendar.

Contact and Support Information • 2

Technology UpdatesReturn to Table of Contents.

Electronic FilingPlease review the Electronic Filing Status System as soon as possible to locate returns that were stopped byCCH due to schema validation errors. As of this release, we have resolved most identified electronic filingissues that were causing these schema validation errors.

To determine if your returns are affected, open ProSystem fx Electronic Filing Status, select Not Accepted> Stopped - CCH Reviewing > Schema Validation Error on the e-filing Status tab, and then click Go.

Important! You must re-calculate, re-export, and re-submit stopped returns for transmission. Returnsthat were stopped due to schema validation errors are not considered timely filed.

In addition to those previously announced, the following state product is approved and available forelectronic filing submission:

PartnershipAlabama Form PPT for Business Privilege Tax Return & Annual Report

2011 Electronic Filing

Corporation and S CorporationUpdates have been made for Michigan CIT.

Technology Updates • 3

Product Updates

Individual (1040) Product UpdatesReturn to Table of Contents.

2012-3.3

Federal

AMT S Corporation Basis Limitation Worksheet. Line 8 calculates as the lesser of Lines 1through 7 or the difference between the original debt amount and the debt basis using AMTentries.Child Tax Credit Worksheet. The artwork has been revised for Line 11 to indicate Form 5695,Part I, rather than Part II.Extra Report. The paragraph indicating that the taxpayer will be 70 1/2 next year and muststart withdrawing from a qualified plan references April 15, 2012.Form 1040. When the farm optional method and/or the non-farm optional method at thebottom of Schedule SE, Page 2, are used, updated ranges will be referenced for the calculationof the net self employment earnings that are a part of Form 1040, Line 29, (self-employedhealth insurance).Form 6198. Disqualifying diagnostic 40223 only counts forms that are printed and included inthe efile.Form 8582-CR. The amount of the Empowerment Zone Employment Credit patrons credit isincluded on Form 8582-CR when the activity that the credit is associated with is passive.Form 8697. The transmittal letter does not include mailing instructions when there is a refundon the form and it is not printed.Form 8839.

Line 12 is limited by the amount of credit on Form 1116, Line 30.Line 12 tentative credit amount is limited to the total of amounts on Line 11.

Letters and Filing Instructions. The option to give the date to return Form 8879 will nolonger apply when E-Sign is elected.Schedule E, page 1. When there is state if different depreciation for the nonresident state andthe resident state, the nonresident state income/loss calculation will use nonresident statevalues for depreciation that is excluded because the ownership is less than 100%.Schedule J. The amount of farm income calculated to be the optimal amount on the ScheduleJ Optimization Worksheet is adjusted to be evenly divisible by 3.Tax Equalization. Maryland Tax Equalization, Line 53, Column 2, calculates even if theMaryland return is not actually present in the return, and Maryland is selected on the Foreign,Tax Equalization > State Line Adjustments, Options and Overrides > State code (Interview FormTE-10, Box 30).Tax Equalization, FICA/Medicare Worksheet.

401K contributions entered on Foreign > Expatriate Wages > Wages (Interview Form EXP-1, Box 73) are included in the FICA adjustments (pre-tax deductions).Amounts entered for hypothetical FICA/Medicare wages - override on Foreign > TaxEqualization > Reconciliation and Cash Flow (Interview Form TE-3, Boxes 33 and 34) arereported as the hypothetical Actual taxable Social Security wages.

Product Updates • 4

Electronic Filing

Batch extension. The batch extension program will check for valid ZIP codes within thetaxpayer's state.Diagnostic 42704. Disqualifying diagnostic 42704 issues when 2210, Part II is blank.Form 5471. Disqualifying diagnostic 42476 will issue when the category of filer is 3 and therequired statement is not present.Form 5695. Disqualifying diagnostic 47912 no longer issues for the spouse's version of Form5695.Form 8938. Disqualifying diagnostic 43964 issues when there are more than two of these formspresent in the return, the federal return is not being electronically filed, but the state return(s)are being electronically filed.Form 9465. Disqualifying diagnostic 48125 issues when a phone number only contains specialcharacters.

Form 8865Form 8825 attachment to Form 8865, Line 21, will now include Line 18b in the total.

Arizona Electronic FilingDisqualifying diagnostic 46748 issues when negative amounts are present on Form 323.

Disqualifying diagnostic 47284 issues when the form is missing the name and/or social security number ofthe spouse receiving more than half of the exemption and/or the spouse receiving less than half of theexemption. Government form overrides cannot be used to generate Form 202. Using government formoverrides will result is incomplete information.

Disqualifying diagnostic 47299 issues when the Head of Household filing status is selected but the first andlast name of the qualifying dependent is missing or invalid on Form 140, Form 140PY or Form 140NR.

CaliforniaA California net operating loss with a carryover of zero will correctly pro forma to next year when Form3805V is not generated.

SBE expenses that are limited on Form 3801 will not flow to Schedule CA.

California Electronic FilingDisqualifying diagnostic 43365 issues to prevent a schema validation error when the SSN is not entered foran alimony recipient.

Disqualifying diagnostic 43451 issues to prevent a schema validation error when only the last name isentered for the executor/guardian.

Disqualifying diagnostic 48848 issues to prevent a schema validation error when a CA corporation number isentered incorrectly for Form 592-B.

Disqualifying diagnostic 48854 issues to prevent reject X0000-010 when a negative net operating loss ispresent on Form 3805V.

ColoradoDisqualify diagnostic 47230 issues to prevent duplicate carryover codes for Form CO 1366.


ConnecticutDiagnostic 47224 issues to prevent the export of a Connecticut return with a Sch CT-EITC if Line 6, W-2 and1099 information, does not contain a valid employer or payer's federal ID number.

Diagnostic 48883 issues if the Schedule CT-SI Employee Apportionment Worksheet does not use days as thebasis.

IllinoisForm IL-1040, Line 1, Federal AGI, will be modified by the amount of current year NOL carried back on theFederal return. Disqualifying diagnostic 41860 will not prevent electronic filing in this situation.

Schedule NR, Line 33, Column B, will equal column A.

Illinois Electronic FilingDisqualifying diagnostic 47285 will issue to prevent electronic filing when the 1099-G does not have therecipient's name or SSN.

Form IL-2210, Line 9b, required installment will be limited to the greater of the calculated amount and 0.

IndianaForm IT-40PNR, Schedule A, Line 20, includes the federal NOL deduction when a state bonus depreciationadjustment - override has been entered on the Indiana Income/Deductions > Tax Add-Back > State bonusdepreciation adjustment - override (Interview Form IN2, Boxes 52 and/or 53).

Indiana Electronic FilingDisqualifying diagnostic 47296 issues when the paid preparer identification number is not a PTIN.

Disqualifying diagnostic 49943 issues when Line 10 of Form IT-40, Schedule 2, or Form IT-40PNR, ScheduleC, is greater than zero but Federal Form IRS-1099G has been "F" coded.

Kansas Electronic FilingThe return will be transmitted to Kansas when a 2010 distribution with the 2nd year amount of the in planrollover to a designated Roth account that was not taxed in 2010 is present.

Kentucky Electronic FilingDiagnostic 47197 issues when a Kentucky Schedule J, Line 2, exceeds the Federal Schedule J elected farmincome.

MaineDiagnostics 37168 and 37170 do not issue at the same time in the return.

Maryland Electronic FilingDisqualifying diagnostic 41525 issues if the recipient name is missing from a 1099-R attached to theMaryland electronic return.

Disqualifying diagnostic 47258 issues if Form 502, Line 29, local tax, does not equal Line 21, taxable netincome, multiplied by the local tax rate, and gross income is above the minimum filing requirement.

MassachusettsSchedule Y, Line 1, calculates correctly when educator expenses are tied to Form 2106.


Massachusetts Electronic FilingDisqualifying diagnostic 42537 does not issue when the EIC credit is correctly taken with no qualifyingchildren.

Michigan - Michigan CitiesThe phone number on form CF 1040 fits when a maximum length phone number is entered.

NebraskaThe amount on Form 1040N, Line 33, is filled with the amount from Form 1040N, Schedule III, Line 75,when the return has been marked as a part-year resident.

Nebraska Electronic FilingDiagnostic 46960 issues when Form 1040N, Line 17, does not equal Form 1040N, Schedule II, Line 59.

Disqualifying diagnostic 45798 issues when the tax due and paid to another state has not been entered withthe adjusted gross income taxed by the other state. This prevents reject S2-0017.

Disqualifying diagnostic 47217 issues when Form 1040N, Line 13, does not equal 1040N, Schedule I, Line 58.This prevents reject F1040N-0056.

Disqualifying diagnostic 47218 issues when Form 3800N, Line 2, does not equal the sum of Form 1040N,Lines 19, 20, 21, 22, 24, and 25. This prevents reject F3800N-0013.

Disqualifying diagnostic 47223 issues when Form 1040N, Schedule I, Line 45, is not equal to Line 45a minusLine 45b. This prevents reject S1-0070.

Disqualifying diagnostic 47694 issues when an amount is present on Form 3800N, Line 4, for the 775 Credit,but the share of credit amount is missing from Line 15. This prevents reject F3800N-0027.

Zero is a valid entry for NE receipts on Form 1065-SN.

New JerseyWhen indicating the taxpayer is eligible and filing for the 2012 homestead benefit, Line 37c, is left blankand Line 38 reflects the taxable income from Line 36 of the NJ- 1040.

New York Electronic FilingDisqualifying diagnostic 41412 issues when New York state withholding is equal to New York citywithholding on a W-2.

North CarolinaForm 400-TC, Line 6, prints zero if the amount is less than zero.

The calculation of credit for income tax paid to another state or country on Form 400-TC, Line 1, includesthe adjustment for net business income that is considered passive income from Form D-400, Line 48.

North DakotaDistributive share of income from a K-1 populates on Schedule WTH.

North Dakota Electronic FilingDisqualifying diagnostic 41599 issues when part-year dates of residency are missing on Form ND-1NR.

Returns with other state withholding will not reject when processed by North Dakota.


The North Dakota return will not reject when there is zero tax liability on Form ND1, Line 20, and a creditis present on Schedule ND-1TC.

OhioSchool district return voucher SD 40P will print for school district 3907.

The Form IT40P extension payment voucher will print in the extension copy of the return.

Ohio Electronic FilingDisqualifying diagnostic 47257 issues when Form ITDA does not contain the city and state or country ofabode.

OregonPassive rental losses no longer are added back as additions when the losses are disallowed on the federalreturn.

PennsylvaniaSchedule NRH, Page 2, Lines 1 - 3, Column C, does not calculate a percentage when no amounts are presentin Columns A or B.

Schedules RK-1 and NRK-1 include royalty income.

Updated REV-677 to populate the Reason for Authorization field.

Updated spouse forms to not print when taxpayer or spouse is deceased and spouse has no taxable income inPennsylvania.

Pennsylvania - Pennsylvania CitiesCLGS-32-1, Line 15, will automatically calculate if a code of 7 is chosen as overpayment code together withestimate code of 1 or 3 in PAC 2.

Pennsylvania Electronic FilingDisqualifying diagnostic 41791 issues when Schedule C has missing address information.

Disqualifying diagnostic 43528 does not issue when spouse Schedule O is present with no amounts in thespouse column.

South CarolinaForm SC 1040, out-of-state income\losses from a passive partnership, correctly flow to Line 3b or Line 3hwhen Form SC8582 isn't present in the return.

Tennessee Electronic FilingElectronic filing is available for multiple TN LLCs and LLC extensions. Disqualifying diagnostic 46754 isdisabled.

UtahDisqualifying diagnostic 43028 issues when Form TC-40C, Line 7, does not equal the taxpayer retirementincome amount.

Utah Electronic FilingDiagnostic 32752 displays direct deposit bank account information.


VirginiaIf a Form 2555 deduction exists on the Federal 1040, Line 36, it will also carry to VA Schedule of Income,Line 6.


Partnership (1065) Product UpdatesReturn to Table of Contents.

2012-3.3

FederalAn new option has been added to Worksheet L/M-1/M-2/M-3 > Schedule M-3 > General and Net Income (loss)Reconciliation > Line 8 (Interview Form L-5, Box 57) entitled "Net other income (loss) items with nodifferences against expenses - override" This new option allows you to (separately) override income detailitems, and (separately) override loss/deduction detail items as shown on the summary statement for otheritems with no differences line of Schedule M-3. Otherwise (when this option is not selected), you canoverride BOTH income and loss/deduction detail items together at the same time by simply entering theincome override (without having to also enter the loss/deduction override) on the Worksheet L/M-1/M-2/M-3 > Income (Loss) Items > Line 29 (Interview Form L-6, Box 160).

New input has been added to the worksheet Income/Deductions > Like Kind Exchange > SupplementalInformation > Line 5 (Interview Form D-6, Box 95) labeled "X to limit net liabilities assumed by other party."Use of this option affects Lines 15 and 18 of Form 8824. See the online help for more details.

Recognized capital gain from like-kind exchange coded as non-portfolio is now carried to the other income(loss) line of Schedule K.

Schedule K-1, Other Deductions calculation, is updated for a rounding issue.

The US Master Tax Guide link for Form 1065, Page 1, Line 12, is updated.

Electronic FilingForm 7004, Line 5a, for tax year is now produced for batch extension filing.

Electronic Filing - 8082Diagnostic 46039 for Form 8082 will no longer issue in error when a foreign address is correct on InterviewForm O-1.

AlabamaA menu update is made for the K-1 Reconciliation form.

CaliforniaForm 540NR, Other Credits statement calculations, are updated.

Form 8825, Lines 14 and 15, are now subject to the personal use percentage when options V or L areselected on Income / Deductions > Rent and Royalty > Option to allocate expenses (Interview Form E-1, Box41).

The statement for Form 568, Page 6, Line 13, is now subject to apportionment and matches the amount onLine 13.

California - Electronic FilingCalifornia schema validation error resolved when Schedule R1, alternate method is selected with a blankPart B.

Illinois - Electronic FilingDiagnostic 47741 is added to prevent rejections from business rule IL1120B-300-2.


Kentucky CitiesThe letters for Lexington Form 228 and Form 228S will now always generate whenever the respective formis present.

Michigan - Grand RapidsSchedule B2, Column 4, now equals Column 2 as dividends are nontaxable for nonresidents.

Schedule B3, Column 5, now includes the portion that can be excluded for corporate partners, if applicable.

Schedule C, Column 2, is now 100% for partners that are partnerships.

Schedule K-1, Line 1, Column C, is now multiplied by the Grand Rapids business allocation percentage onLine C.

Mississippi Electronic FilingA numeric partner percentage is required for Mississippi electronic filing purposes. Diagnostic 43670 is nowissued for any missing partner percentages.

New YorkForm POA-1 now includes the signing person's name and title on Page 2.

New York - Electronic FilingNew York validation error resolved when IT-604, Lines 11 or 46, exceed 1.0.

PennsylvaniaThe instruction guide is updated to include the five Pennsylvania credits that are new for 2012.

Pennsylvania - Electronic FilingAdjustments are made to round up the profit share, loss share and owner capital rates to six decimal placessince Pennsylvania only allows six on Schedules RK1 and NRK1.

Rhode IslandForm RI-1065 tax is now included in the state accrual of taxes on Form 1065, Page 1, Line 14, and thebalance sheet.

Utah - Electronic FilingDiagnostic 46703 for Schedule J is updated for returns where the apportionment factor override is present.


Corporation (1120) Product UpdatesReturn to Table of Contents.

2011-5.7

California CombinedThe program has been updated to apply the correct limitations on form 3805Z, worksheet II, whenEnterprise Zone codes 97 or 98 are used.

MichiganCIT Form 4891, Line 25, will no longer show NOL (net operating loss) from a prior MBT period.

CIT Form 4891, UBG return, Line 9(h), will now mark, and Line 9(k) will populate with 100%.

CIT Form 4897 will now show the sales and proration amounts for all the companies that are protected byPublic Law 86-272.

MBT Form 4568, Line 39, will now refer to Form 4573 fiscal year return version.

Small fonts have been enabled on all Corporate Income Tax (CIT) forms to prevent larger numbers fromrounding out.

Worksheet View input Michigan > General (Fiscal MBT) will now correspond to the correct interview formbox (MBT1, Box 43).

2012-3.3

FederalNew input has been added to the worksheet Income/Deductions > Like Kind Exchange > SupplementalInformation > Line 5 (Interview Form D-6, Box 95) labeled "X to limit net liabilities assumed by other party."Use of this option affects Lines 15 and 18 of Form 8824. See the online help for more details.

ConsolidationCombined/Consolidated returns will no longer retain corporation name and identification information fromparent and subsidiary on certain forms, when inter-company apportionment elimination is entered at theconsolidated level.

Electronic FilingReturns will no longer stop for a schema validation error when an invalid character is only entered on Form926, Line 17b.

Alabama Electronic FilingDiagnostic 47265 added to make sure all subsidiary returns still contain the proper "proforma return" filingstatus.

Diagnostic 43943 for Form 20C will now check for filing the "consolidatedfilingindicator" in the electronicfile and verify the proper PDF attachments are made.

Arkansas Electronic FilingForm 1100CT has been revised to omit form 110CT, Page 2, from the electronic file when designated as atype 1 file on Form 1100CT, Page 1, this will prevent reject code 2012-00089.


Form 1100CT, Page 2, Line 5, has been revised to be included in the electronic file with the correct formatto prevent schema validation rejections.

Form 1120CT, Schedule A, has been revised to excluded from the electronic file if the entity has beenidentified as a filing status 1 - Corporation operating only in Arkansas on Form 1120CT, Page 1.

Form 620-EXT has been revised to omit information from the electronic file applicable to the extension,when the extension is active and the return is being electronically files.

Delaware - Electronic FilingThe Delaware electronic filing has been revised so that there is no longer an error message when exporting aconsolidated return when DE is in the parent or sub.

GeorgiaExtension filing instructions will correctly indicate that Form 600 or 600S has been extended whenelectronic funds transfer has been selected.

Extension filing instructions will correctly indicate that Form 600 or 600S has been extended when no tax isdue.

HawaiiForm D-1, Line 16, ordinary gains from installment sales, has been revised to include overrides entered forFederal Form 6252, Line 25, ordinary income under recapture.

IllinoisSchedule NLD Page 2, Schedule of Net Operating Losses continued, will no longer show information for a lossnot included on Schedule NLD Page 1.

Schedule NLD, Schedule of Net Operating Losses, will no longer print when the Tax Year End is before12/31/12.

Illinois CombinedForm IL-1120, Line 31, business income or loss allocatable to Illinois, will match Schedule UB, Step 4, Line5, Column D, and Line 34, base income or loss allocatable to Illinois, will match Schedule UB, Step 4, Line10, Column D.

Illinois - Electronic FilingA diagnostic was added to no longer allow Schedule UB NLD for electronic filing.

KentuckySchedule TCS will now generate when the Energy Efficiency Products Tax Credit (Form 5695-K) and/or theEnergy Star Home Credit (Form 8908-K) are the only credits in the return.

When the Lexington Extension is unlocked, it will now reflect its unlocked status on the Extension Report.

LouisianaForm 620-EXT-V has been added to allow the mailing of payments for amounts due with extension.Transmittal letters have also been revised to include the amount due to be mailed, when electronic fundstransfer has not been selected.

Form 620, Page 10, Line 8 and Line 9 statement references, have been revised to print on the applicable eline when present in the return.


Form 624 has been revised to print when present and active in the return.

Louisiana - Electronic FilingForm CIFT-620EX has been revised to print when exporting extensions.

Letters and Filing instructions for form 620-EXT have been revised to require filing via the state of LouisianaWeb site when the amount due is $5000 or greater.

Maine - Electronic FilingElectronic filing diagnostic 47270 will now issue when direct deposit is indicated for refunds over$10,000.00.

Electronic filing diagnostic 46028 will now issue when direct deposit is indicated in a return with no refund.

Electronic filing diagnostic 45993 will now issue when financial transaction information is missing fromGeneral > Basic Data > Direct Deposit/Electronic Funds Withdrawal (Interview Form BNK-1 Boxes 30 through39).

Electronic filing diagnostic 39515 now includes the Capital Investment Credit Worksheet in the list of formsthat are not included in the electronic return file.

MarylandForm 500, Line 5, will now include FDS NOL amounts.

Massachusetts - Electronic FilingDiagnostic 48159 will no longer issue when Schedule E-2, Lines 5c and 5d, are blank and Line 5e is not.

MississippiForm 83-105, Reporting Entity FEIN will now only fill if the return is part of a combined group.

Mississippi contributions deduction included on Form 83-122, Line 14 will now compute accurately in onecalculation of the return.

Mississippi - Electronic FilingDisqualifying extension diagnostic 57229 will now issue when affiliated members have been included on theextension without a payment amount.

North Dakota - Electronic FilingDisqualifying diagnostic 44865 now issues when the routing transit number is blank.

Electronic filing instructions for mailing Form 40-EPV will no longer refer to the tax year since the tax yearis already given in the filing instructions for each return.

TennesseeExtension Form FAE173 financial transaction information now appears correctly in the electronic return file,transmittal letters and diagnostics when there is a minimum amount due of $100 in the return.

WisconsinIn Wisconsin combined group member returns with apportionment entered on the Wisconsin Interview Formsand Worksheets and no apportionment on the federal apportionment forms, the apportionment entries willbe recognized when determining if an apportionment input has been made for Wisconsin.


Wisconsin - Electronic FilingA condition has been added for the electronic filing of combined groups that have the name and FEIN of thedesignated agent input on the Wisconsin > Combined Return > Reconciliation of Federal Taxable Incomeworksheet or Interview Form CC-WI1, Boxes 30 and 31. If the FEIN entered as designated agent does notmatch the FEIN of any parent or subsidiary returns, diagnostic 37281 will issue and the company informationfrom the consolidating return will be sent in the electronic file.

Conditions have been added to Wisconsin returns with the option to automatically generate PDF files ofstatements from Schedule V, Lines 8 and 9, and Schedule W, Lines 9 and 10, selected to prevent thepossibility of the returns being stopped for PDF errors after being exported for electronic filing.

In Wisconsin corporation returns which are using direct debit/deposit to withdraw or transmit the balancedue or refund, diagnostic 47285 will issue if no bank routing transmit number is entered on either theFederal > General > Basic Data > Direct Deposit/Refund worksheet section or Interview Form BNK-1, Box35.

In Wisconsin returns with Form 5 and Schedule RT, diagnostic 45360 will activate if Schedule RT is activebut there is no expense information input for Schedule RT, Part I.


S Corporation (1120S) Product UpdatesReturn to Table of Contents.

2012-3.3

FederalAn new option has been added to Worksheet L/M-1/M-2/M-3 > Schedule M-3 > General and Net Income (loss)Reconciliation > Line 8 (Interview Form L-5, Box 57) entitled "Net other income (loss) items with nodifferences against expenses - override" This new option allows you to (separately) override income detailitems, and (separately) override loss/deduction detail items as shown on the summary statement for otheritems with no differences Line of Schedule M-3. Otherwise (when this option is not selected), you canoverride BOTH income and loss/deduction detail items together at the same time by simply entering theincome override (without having to also enter the loss/deduction override) on the Worksheet L/M-1/M-2/M-3 > Income (Loss) Items > Line 29 (Interview Form L-6, box 160).

New input has been added to the worksheet Income/Deductions > Like Kind Exchange > SupplementalInformation > Line 5 (Interview Form D-6, Box 95) labeled "X to limit net liabilities assumed by other party."Use of this option affects Lines 15 and 18 of Form 8824. See the online help for more details.

Worksheet view Partnership Passthrough > Partnership Passthrough > Tax Exempt Interest and InvestmentIncome adjustment and Investment expense will show on correct lines when entered and switch to InterviewForms.

You may now choose to NOT alphabetize "Other Deductions" on the supporting statement to Schedule M-3 byselecting Worksheet >> Sch L/M >> Schedule M-3 >> 1-General and Net Income (Loss) Reconciliation >> DoNOT combine similar descriptions (Interview Form L-5 box 56).

Electronic FilingA diagnostic has been added to prevent rejection F1120S-263 when print of Form 1125A is not selected andForm 1120S, Line 2, is not equal to zero.

Diagnostic 47479 will now issue to prevent a schema validation error when invalid shares of stock areentered on Form 1120S, Schedule B, Lines 5a and 5b.

Diagnostics will no longer issue when an extension is produced through batch processing in ProductionProcessing and the return is selected for electronic filing.

Federal elections will no longer print in the government copy when the return is electronically filed unlessthe option is selected to print the full government copy of the return.

The ERO date signed is now available in Worksheet View for 1120S returns.

Alabama - Electronic FilingForm 20S, Schedule K, Line 4 will put the amount after adjustments in the electronic file instead of theamount before adjustments.

Arkansas - Electronic FilingForm 620-EXT has been revised to omit information from the electronic file applicable to the extension,when the extension is active and the return is being electronically files.

ConnecticutNew input has been added on the Connecticut Composite Information worksheet or Interview Form CT1, box48 to suppress Form CT K-1T for electronically filed returns.


Shareholders can now be included or excluded from the CT-1065/CT1120SI composite tax return Schedule Busing input on Federal Shareholder State information worksheet or Interview Form STK-1.

The change of Address check box on form CT-1065/CT-1120SI is now blank when the change affects thefederal return only. Please use the Common State General Information worksheet and select "noname/address change" or enter a code "4" on Interview form GEN-1, box 72.

GeorgiaExtension filing instructions and transmittal letters will refer to IT-560C Composite and use the correct filingaddress.

Form IT-CR, Composite Income Tax, will now print when no tax is calculated and the form is forced.

Schedule K-1 Equivalent, addition for depreciation adjustment will use special allocation code "12253" andsubtraction for depreciation adjustment will use special allocation code "12255."

HawaiiIf a special allocation is used for Hawaii Schedule K-1, Line 1(c), Ordinary Income Attributable toElsewhere, this has been revised to be zero when the same Line on Hawaii Schedule K is zero.

IllinoisWhen Form IL-1023-C, Line 3, taxable income, is different than Line 1c plus 2c, a diagnostic will issue.

Schedule 1299-A, Tax Subtractions and Credits, will show credits calculated for qualified unemployedveterans on Line 49, Veteran Credit.

Schedule 4255, Recapture of Investment Tax Credits, Lines 14 (amount from other 4255 filed this year) and15 (distributive share of recapture from partnerships and s corporations) will show a 0 when the column isbeing used and the Line has no amount.

Schedule NLD, Schedule of Net Operating Losses, will no longer print when no loss is being taken.

IndianaForm IT-20S has been revised to include new credit codes: 839 EDGE Job Retention Credit, 849 - SchoolScholarship Credit and 850 - New Employee Credit.

IowaEntries for Parent's name and Parent's FEIN number entered on Common State Data/Consolidated/CombinedReturn Information or on Interview Form Gen-2 will now carry to the Name of Consolidated Parent andParent's FEIN fields in the Filing Status section of Form 1120F.

The Date Sold or Disposed field on IA 4562A will not be completed based on depreciation entries if theautomatic sale feature is not used.

The Iowa Form IA4562A has been updated so that Columns G and J will include the Federal and Iowa Section179 amounts that have been added this year. .

The Separate Iowa/Consolidated Federal Filing Status will now be checked on Form 1120F when the federalreturn is consolidated.

KansasForm KW-7 and KW-7S now reflect the correct number of total schedules and additional schedules on theKW-7 and KW-7S.


KentuckyForm 740NP-WH, Line 6 will no longer subtract the apportioned share of interest expense on investmentdebts (Kentucky Schedule K-1, Line 11(a)) in its calculation.

Form 740NP-WH can now be forced when it is not required to be filed.

Form 740NP-WH will now check the "Final return" Box when the return is final.

KY Schedule O-PTE, Part II, Line 8 will no longer reflect a subtraction from federal taxable income fromKentucky Schedule(s) K-1 when no subtraction is needed.

Schedule NP Column (e) is now the computed tax net of applicable credits.

Kentucky CitiesLexington's Extension will no longer lock until April 15th, 2013.

LouisianaFiling instructions and letters have been revised to default to mailing the amount due with if the amount isless than $5000 and direct debit option is not active in the return.

Filing instructions and letters have been revised to default to the text related to mailing the payment forForm CIFT-620 when the amount is less than $5000 and the option to use direct debit is not present.

Form 620-EXT-V has been added to allow the mailing of payments for amounts due with extension.Transmittal letters have also been revised to include the amount due to be mailed, when electronic fundstransfer has not been selected.

Form 624 filing instructions have been revised to only produce when the form is active in the return.

Maine - Electronic FilingAdded electronic filing diagnostic 47241 for business entity type Shareholders that have an incorrectlyformatted FEIN.

MarylandExtension Form 510E will now pull tax amounts only from Form 510 unless Form 500 is active in the return.

Maryland - Electronic FilingDisqualifying diagnostics 47242, 47243, 47244 and 47245 will now issue when Form 500UP, Line 6 amountsare not the appropriate percentage of Line 4.

Disqualifying extension diagnostic 57225 will now issue when the date is more that 10 months and 15 dayspast the period end date.

MassachusettsMassachusetts Composite Schedule D, Line 22, will now calculate at 5.25% (0.0525) down from 5.3% (0.053).

Massachusetts Form 355S, Line 16, will now calculate Line 14 minus Line 15 if return has been marked asmember of a unitary group with a tax year ends is different than the unitary group on Interview Form MA1,Box 40, or Massachusetts General worksheet, Basic Data section, Member's tax year ends in a differentmonth than the unitary group field.

Massachusetts Form 355S, Line 19, will now pick up the extension payment not based on income fromInterview Form ST-PAY1, Box 111, worksheet Federal Payments/Penalties > Payments > State QuarterlyPayments > Amount paid with extension not based on income field if return has been marked as member of aunitary group with a tax year ends is different than the unitary group on Interview Form MA1, Box 40, or


Massachusetts General worksheet, Basic Data section, Member's tax year ends in a different month than theunitary group field.

Massachusetts - Electronic FilingDiagnostic 44366 will now issue to prevent a rejection when the return is a short year return.

Diagnostic 47742 will now issue to prevent a rejection from business rule F355S-195.

Diagnostic 56840 will now issue when the extension is selected for electronic filing and the return is notselected for electronic and an invalid phone number has been entered for the direct debit.

MinnesotaMinnesota Schedule KS, Line 33 worksheet , prior year 179 calculation, 1/5th allowance will now useMinnesota apportioned amount.

Minnesota - Electronic FilingMinnesota e-filing, property and payroll factor weights, will now round up to five digits after the decimal,when only one of these factors present to meet the State e-filing requirement.

MississippiForm 84-131 and Form 84-132 will no longer include franchise tax credits as these credits should not bepassed through to shareholders.

Mississippi - Electronic FilingDisqualifying diagnostic 43970 will now issue when zeros have been entered without a county for Form 84-110, Assessed value of Mississippi property.

MissouriIf there are shareholders excluded from Form TAX SCH, the total for Column 7, Missouri estimate tax paid,no longer comes up short. Therefore, the Form MO-1040, Line 33 amount has also been revised to includethe full estimated tax payment.

New HampshireUpdated the ability to limit what Individual entity to bring up to the Combined Report by input entered onNew Hampshire Combined Return Worksheet, Combined Report Automated Feature Section (Interview FormNH-AFF), columns 'T/S/LLC' and 'Entity Number'.

New JerseyFederal Section 179 expense on Form CBT-100, Schedule S, Line 1 will agree to the amount reported on thefederal computation of taxable of income as a C corporation (limited to C corporation taxable income)rather than Form 4562 (limited to business income.)

New YorkLines 4, 8, and 12 of Form NYC-3A, Schedule J have been updated to use factors of 20, 60, and 20respectively.

OhioThe long menu name for the form CAT GR has been updated to reflect the correct tax years. The correctcross reference will be produced for the form CAT GR when requested.


Oklahoma - Electronic FilingDiagnostic 45082 for Form 512-S, Page 4, Part 6, Line 5, Address at which books are kept, has been updatedto also refer to General, Basic Data, State Information, location of Books address fields (Form 5, location ofbooks fields).

OklahomaElectronic Filing for Form 512-S, Page 2, Part 3, Line 16, Column B, Other deductions, has been updated soit will not stop for Schema Validation errors .

OregonOregon Schedule K-1 will now pick up current year credits when the amount is entered on Interview FormOR4, Boxes 30 - 45 or worksheet Oregon Credits > Credits section. The current year credit and the carry-forward will be combined as one amount on the Schedule K-1 and will use the same allocation code.

South CarolinaForm SC1040, Line 17, will now include composite over-payments.

Forms not available for electronic filing will now print when the electronic filing is selected for the return.


Fiduciary (1041) Product UpdatesReturn to Table of Contents.

2012-3.3

FederalLine 23 of the ESBT 8801 will now reflect AMT foreign tax credit when entered.

Grantor overrides for 1231 sales and 1250 installment sales will now function separately.

The credit from Form 8912 will now either be reflected on the ESBT or Form 1041, Page 2, Schedule G, Line2d, and not on both.

The ESBT depletion 65% of net income limitation calculation has been updated to reflect the ESBT taxableincome.

Electronic FilingDiagnostic 37930 was added to inform customers that Form 8868 cannot be filed electronically.

Diagnostic 47971 will now issue requiring an EIN if Form 8941 is present in any return. The diagnostic willread as follows, "If Form 8941 is present in the return then there must be an EIN for employer reporting online 1b of Form 8941 or the return will reject - regardless of whether or not there is a ine 1a."

Diagnostic 49057 for Schedule C-EZ will no longer issue without corresponding diagnostic 49002 disallowingit from export.

Reject 0060 has been resolved and returns will be processed through the taxing authority.

Returns with blank City, State, and ZIP on Form 8824 will no longer receive reject 0060.

Federal - Foreign Financial AssetsA copy of the 8938 with only Part I assets will print multiple pages of Page 1 and only 1 Page of Page 2.

Partial Grantor TrustIndirect fiduciary fees will now be properly allocated to tax exempt income.

Passthrough expenses subject to the 2% limitation will no longer double.

IowaStatements for IA State Schedule D will now print the detail correctly.

KentuckyTotal distributions on the KY Schedule K-1 will be limited to lesser of accounting income or DNI for simpletrusts.

Massachusetts - Electronic FilingMassachusetts state only extensions will no longer stop for schema validation error.

MichiganGrantor letter for MI will correctly display MI gain and amount being excluded for Section 271.


Minnesota - Electronic FilingDiagnostic 49626 will now issue if the Sch EST has been suppressed while there is an amount on Line 19 ofForm M2.

PennsylvaniaFootnotes for PA RK-1 will now be correctly attached.

South CarolinaSchedule K-1. State and local taxes added back on the South Carolina K-1 will not be added back to thefiduciary on the South Carolina 1041.


Exempt Organization (990) Product UpdatesReturn to Table of Contents.

2012-3.3

FederalThe custom filing instruction special paragraph for electronic filing is no longer suppressed when GeneralWorksheet, Letters and Filing Instructions section, Line 14, or Interview Form 7, Box 51, has been checked.

The Form 8827, Line 2, now pulls amount from Form 8827 worksheet, Credit for Prior Year Minimum Tax,Line 2, or Interview Form T-14, Box 41.

The print position for the Schedule R, Part IV, continuation page Column 4 has been corrected.

Electronic FilingThe diagnostics and filing instructions no longer mention electronic filing when the General, ElectronicFiling section, line 1 or Interview Form EF-1 box 30 is answered No.

The electronic filing diagnostic 42627 text has been revised. It no longer mentions New York and California.

The electronic filing diagnostics 46520 and 46506 have been updated to include Form 8275-R. Theelectronic filing diagnostic 56808 now references Interview Form EF-1, Box 40, instead of Box 39.

The Form 990 electronic filing diagnostics no longer appear when the General worksheet, Electronic Filing,Line 1, or Interview Form EF-1, Box 30, is marked N .

Electronic Filing - 5471The electronic filing diagnostic 49988 is now issued when the employer identification number on Foreign -Form 5471 worksheet, U.S. Filer Information section or Interview Form G-4, Box 78 is blank.

The Form 8858 Schedule G for Form 5471 now contains the correct information in the electronic file forSchedule G lines 4 and 5c.

CaliforniaThe California Form 199 Question I statement now mentions Question I instead of question J in the heading.

The California electronic filling now contains the information present on Form CA199 Part I, Line 3statement.


Upcoming ReleasesReturn to Table of Contents.

Look for the following updates in a future release:

2012-3.4

Individual (1040) Product Updates

FederalForm 3800. EIN input has been added to Credit Options and Adjustments > Flowthrough credits - Form 6478for credits that are from a cooperative not associated with a business or farm.

Form 8958. Disqualifying diagnostic 46849 issues when a foreign address is entered in a community propertystate return.

District of ColumbiaTransmittal letters and filing instructions do not mention D-40 individual returns when only D-30 UBT returnsare present in the DC return.

S Corporation (1120S) Product Updates

LouisianaForm 620, Page 10, Line 8 and Line 9 statement references, have been revised to print on the applicableline when present in the return.

Fiduciary (1041) Product Updates

FederalForm 8878-A will now print in all copies.

Upcoming Releases • 24

UNITED STATES DISTRICT COURT DISTRICT OF

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