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- Posted The Quebec tax guide is very clear about the reporting of... on Credits and deductions. October 31, 2019 5:15 AM
- Posted We are now 3 weeks after I reported this bug to TurboTax.... on Credits and deductions. October 31, 2019 5:15 AM
- Posted Will TurboTax always choose to use the correct Quebec drug prescription plan premiums paid expense when it has a choice between the 2017 and 2018 amounts paid? on Credits and deductions. October 31, 2019 5:15 AM
October 31, 2019
5:15 AM
The Quebec tax guide is very clear about the
reporting of RAMQ contributions. If the 12 month period for medical expenses
starts in 2017, then the 2017 RAMQ contributions are supposed to be claimed on
the 2018 Quebec report. When the 12 month period starts on January
1, 2018,
then the 2018 RAMQ contributions are to be claimed.
The Federal guide simply states that RAMQ contributions can be claimed without
referring to which year’s RAMQ contributions apply with regard to when the 12
month period starts.
Lynda, like you suggest, TurboTax uses in the 2018 Federal report the 2017 RAMQ
contributions (carried forward from the 2017 TurboTax database) and TurboTax
uses in the 2018 Quebec report the freshly calculated 2018 RAMQ contributions,
but only when the 12 month period for medical expenses starts on January 1,
2018.
Since we had unclaimed medical expenses from November 2017, we chose the 12
month period start date to be November 16, 2017 (end date November 15, 2018),
but TurboTax set the RAMQ contributions on the QMED worksheet to be $0.00
instead of the correct amount, which I could not override.
Shifting the start date back to January 1, 2018 caused the 2018 RAMQ contribution
to appear on the QMED worksheet, but this is not the start date we needed, so I
had to find a workaround to work with a start date of November 2017.
My workaround was to zero out the 2017 RAMQ contributions which were part of
the carry forward data from our 2017 TurboTax report and then to create a false
medical bill equivalent to the 2017 RAMQ contribution in the list where normal
medical expenses are recorded.
The consequence was that an equivalent amount to the erased 2017 RAMQ
contribution was applied to the 2018 Federal report, which is what TurboTax
always intended regardless of when the 12 month period starts, and the same
equivalent amount to the 2017 RAMQ contribution was applied to the 2017 Quebec
report which is what the Quebec tax guide dictated for cases when the start
date of the 12 month period occurs in 2017. So my workaround appears to
succeed.
However, for other tax filers where there is a major difference between 2017
and 2018 RAMQ contributions due to changing jobs or retiring, if their 12 month
period start date is in 2017, then this workaround will not help them.
I believe that the problem I faced is due to a software bug which I reported to
Intuit, who agreed to correct it and to also report the bug's existence to the
tax authorities.
The key question is when are RAMQ contributions deemed to be paid? From Revenue
Quebec's point of view, the 2018 RAMQ
contributions are considered an expense generated on the last day of 2018 tax
year, thus they can be claimed on the Quebec report when the 12 month period
includes December 31, 2018. While the Federal tax guide is not
as precise as the Quebec guide, I believe that the CRA
intended that the 2018 RAMQ contributions be applied to the 2018 Federal tax
report only when the 12 month period starts on January 1,
2018 and
ends on December 31, 2018. But the CRA appears to be flexible
in determining the date when RAMQ contributions are deemed to be paid, which
could also be interpreted as being the date when the Quebec resident receives
their notice of assessment for tax year 2018 (June 2019 for example).
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October 31, 2019
5:15 AM
We are now 3 weeks after I reported this bug to TurboTax. The latest Turbo Tax update does not repair this bug. I had to make corrections on paper and send them by postal mail yesterday to Revenue Quebec. So much for quick resolution of bugs by TurboTax.
... View more
October 31, 2019
5:15 AM
In my case, when TurboTax gets the Federal return correct and it gets the Quebec return wrong, or vice-versa, as the 12 month period shifts.
Carry
Forward data from the TurboTax 2017 return includes the 2017 premium paid under
the Québec Prescription Drug Insurance Plan ($663.50 in my case). This amount
is available to be imported into the 2018 TurboTax return when the 12 month
period for medical expenses is shifted to include December
31, 2017. TurboTax
applies this carried forward $663.50 deduction correctly in the 2018 Federal
return as this amount eventually finds its way to line 330 of Schedule 1. However,
in the Quebec return, the same $663.50 deduction does not
find its way to line 36 of Schedule B, it is replaced by $0.00. It is
impossible to force the software to edit the $0.00 to be $663.50 for the Quebec return, thus the deduction is lost in
the Quebec return. I believe that this is a software bug.
If I shift the 12 month period to start January 1, 2018 and end December
31, 2018,
then TurboTax sets this deductible medical expense in the 2018 Quebec return to $641.50, which is the
correct drug insurance premium paid in 2018. In conclusion, there appears to be
no provision to carry forward the admissible Quebec drug insurance premium expense to
the 2018 Quebec return as is already done correctly for the
Federal return.
P.S. As I mentioned above, shifting the 12 month period to the 2018 calendar year (January 1, 2018 to December 31, 2018) forces TurboTax to set the prescription drug expense to the correct amount on the 2018 Quebec return, however the amount used in the 2018 Federal return remains the same as if the 12 month period started in 2017 and ended in 2018, which is a software flaw. In my particular case, the insurance plan premiums for both years are a few dollars apart so the impact on my tax bill is slight. But for other tax filers, whose drug premium expense changes drastically from one year to another, then the total Federal tax payable could be over or under calculated by up to $150 depending on individual's the marginal tax rate.
So to summarize the two software flaws: (1) for the 2018 Quebec return, if the medical expense 12 month period spans from 2017 to 2018, in my case TurboTax substitutes $0.00 instead of $663.50 for the 2017 drug premium paid deduction. (2) for the 2018 Federal return, if the medical expense 12 month period is all within one calendar year (2018), then TurboTax uses the (carried forward) 2017 drug insurance premium expense ($663.50) as the 2018 medical deduction instead of using the latest available drug insurance premium ($641.50) that was paid for 2018.
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