My software will not let me take the 50% of charitable contributions over $500 deduction on Form M1. In looking at the M1M instructions for this it says if there is a M1SA (MN itemized deductions) filed then you cannot take a deduction for 50% of charitable contributions over $500. The issue on 2 clients thus far is there is a Form M1SA on their return but after deducting the state withholding from the total of their itemized deductions they are below the MN standard deduction and the bottom line of M1SA ends up being standard deduction amount. Software company says this contribution deduction is not allowed because M1SA form is part of return. I am wondering if that is correct? Seems like they should be able to deduct half their contributions over $500 as long as they are not benefiting from the M1SA form over their standard deduction amount. If i take out mortgage interest or another big deduction then M1SA does not print out and they end up with the charitable over $500 deduction. Wondering if this is a software programming issue or if that is the case that as long as there is a M1SA form with the return they do not qualify for the 50% charitable deduction even if they are ending up with standard deduction. thanks for your replies
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It is a software bug. What software are you using? I use ProSeries, and there have been multiple 'bugs' with both M1SA and charitable contributions.
"Software company says this contribution deduction is not allowed because M1SA form is part of return."
M1SA is NOT part of the return if you are not claiming Minnesota Itemized deductions.
As you mentioned for a work around, you can either try to delete the M1SA or remove some expenses so it automatically is removed.
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