Form 8960 TurboTax Error

Form 8960 TurboTax Error – Causes, Consequences, and Solutions

Form 8960 is used to calculate the Net Investment Income Tax (NIIT) that applies to individuals, trusts, and estates.

The 3.8% tax rate primarily targets income from investments, and it can have significant tax implications.

However, users of tax software like TurboTax occasionally encounter errors related to Form 8960.

This article explores the potential causes of such errors, the consequences if not addressed, and how to fix them.

Potential Causes of Error

Incorrect Software Version

  • Using an outdated or unsupported version of TurboTax could lead to errors, including those related to Form 8960.

Incomplete Information

  • Skipping or inaccurately filling in relevant fields can result in errors, as the software uses this information to calculate the tax.

Software Glitches

  • Software bugs, though rare, could also cause an error with Form 8960.

User Error

  • Sometimes, the error could be due to a misunderstanding of tax laws or incorrect data input by the user.

Consequences of Error

Incorrect Tax Amount

  • An error in Form 8960 can lead to an incorrect calculation of the Net Investment Income Tax, which could either result in overpayment or underpayment of taxes.


  • If the error leads to an underpayment of tax, the IRS may impose penalties and interest charges.

Delayed Returns

  • Errors must be corrected before submitting, which can delay the processing of your tax return and any refund you might expect.


Software Update

  • The first step in resolving a TurboTax error related to Form 8960 is to ensure you are using the latest version of the software.

Double-Check Input

  • Go back and ensure that all the data you entered is accurate and complete. Double-check numbers and make sure all required fields are filled in.

Consult TurboTax Support

  • TurboTax offers robust customer support, including articles, forums, and customer service reps who can help identify and resolve the error.

Manual Review

  • Consider printing the form and reviewing it manually to check for errors. If you find discrepancies, correct them in the software.

Seek Professional Help

  • If the error persists or if you are unsure how to correct it, consult a tax professional or a CPA for advice.

Reinstall Software

  • As a last resort, you can try reinstalling the TurboTax software to resolve any glitches or bugs that might be causing the error.


Errors on Form 8960 can be frustrating, but they are usually correctable with some diligence and attention to detail.

Always keep your TurboTax software up-to-date, review your inputs carefully, and don’t hesitate to seek professional advice when in doubt.

Addressing these errors promptly can save you time, money, and stress in the long run.

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Form 8960 TurboTax Error

Form 8960 TurboTax Error: 40 Frequently Asked Questions

General Questions

  1. What is Form 8960?
    Form 8960 is used to calculate Net Investment Income Tax (NIIT), a tax on investment income for individuals, estates, and trusts.
  2. What is TurboTax?
    TurboTax is a tax preparation software that helps users file their federal and state taxes electronically.
  3. Why am I getting an error on Form 8960 in TurboTax?
    The error could be due to various reasons such as incorrect data input, software glitches, or outdated software.
  4. Is the error message specific?
    The specificity of the error message can vary, but it usually provides a clue as to what needs to be corrected.

Consequences of Error

  1. What happens if the error is not corrected?
    An incorrect Form 8960 can lead to either overpayment or underpayment of taxes.
  2. Can I face legal consequences for an error on Form 8960?
    If the error results in the underpayment of taxes, the IRS might impose penalties and interest.
  3. Will my tax return be delayed due to this error?
    Yes, errors must be rectified before submitting the tax return, potentially causing delays.

Solving the Error

  1. How can I resolve this TurboTax error?
    Start by making sure your TurboTax software is up to date, then double-check the input data for Form 8960.
  2. Can TurboTax Support help?
    Yes, TurboTax offers customer support to help you troubleshoot the error.
  3. Should I reinstall TurboTax to fix this error?
    Reinstallation should be the last resort if all other troubleshooting steps have failed.
  4. Can I manually review Form 8960?
    Yes, you can print the form and review it manually.
  5. Do I need professional help to fix this error?
    If the error persists, consulting a tax professional is advisable.

Technical Issues

  1. Is the error due to a bug in the software?
    It’s possible, but software bugs are generally rare.
  2. How do I update TurboTax?
    TurboTax usually prompts you for updates, or you can manually update from the software’s menu.
  3. Can the error affect other forms?
    Generally, no, unless those forms are dependent on the calculations made in Form 8960.

Additional Information

  1. How do I identify what caused the error?
    Review the error message and backtrack your steps to identify the cause.
  2. Is the error common?
    Errors in Form 8960 are not common but are certainly not unheard of.
  3. What tax year does this error relate to?
    The error can occur in any tax year for which you are filing a return.
  4. How do I know if I need to fill out Form 8960?
    Generally, you’ll need to fill it out if you have investment income and your income exceeds certain thresholds.
  5. What income types does Form 8960 affect?
    Form 8960 typically impacts income from investments, such as dividends, rental income, and capital gains.
  6. Is Net Investment Income Tax the same as capital gains tax?
    No, NIIT is separate and in addition to any capital gains tax you may owe.
  7. Does this error affect state taxes?
    Form 8960 is for federal taxes, but an error might affect your state tax return if it relies on your federal information.
  8. Is the software error specific to TurboTax?
    The error may be specific to TurboTax or could occur in other tax software as well.
  9. Can I use another software to check if the error is specific to TurboTax?
    Yes, you can use another tax software to cross-check the error.
  10. Can I correct the error after filing my tax return?
    If you’ve already filed, you’ll need to amend your return to correct the error.
  11. Is there a deadline to fix this error?
    The deadline would be the filing deadline for your federal tax return.
  12. What is the current Net Investment Income Tax rate?
    As of my last update in September 2021, the rate is 3.8%.
  13. Can I avoid filling out Form 8960 if I don’t have significant investment income?
    Yes, Form 8960 is generally only required if you have investment income above a certain threshold.
  14. Is Form 8960 required for corporations?
    No, Form 8960 is generally for individuals, estates, and trusts.
  15. What if I make an error in calculating my Net Investment Income Tax?
    An error could lead to penalties from the IRS.
  16. Does TurboTax automatically include Form 8960?
    TurboTax should include Form 8960 if it detects that you have investment income requiring the form.
  17. Can the error lead to an IRS audit?
    While not common, any inconsistencies in your tax return can potentially trigger an IRS audit.
  18. What should I do if the IRS contacts me about this error?
    Respond promptly and consider consulting a tax professional for advice.
  19. Do I need to notify the IRS if I discover this error after filing?
    Yes, you should file an amended return.
  20. Is the NIIT applicable to foreign investment income?
    Generally, yes, foreign investment income is usually subject to NIIT.
  21. How do I correct the error on a paper return?
    You can manually amend the paper return and resubmit it.
  22. How do I ensure this error doesn’t happen again?
    Keeping your software updated and double-checking your entries can reduce the risk of errors.
  23. Can I claim a refund if the error led to overpayment?
    Yes, you can file an amended return to claim a refund.
  24. Is the error related to the TurboTax online version or the desktop version?
    The error can potentially occur in both versions.
  25. What are the risks if I ignore this error?
    Ignoring the error can lead to incorrect tax payment and possible penalties.

By understanding these FAQs about Form 8960 TurboTax error, you can be better prepared to handle any issues that arise, thereby ensuring a smoother tax filing process.

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