Drake Tax – Program Updates

1040 extension batch e-file

e-File Status button on the Home window toolbar with a notification when acknowledgments are available to retrieve

An in-product Help Assistant, available 24/7, that provides access to current hot and predefined topics as well as natural language search of the Knowledge Base

Business Tax (1120/1120-S/1065) Enhancements

• Tax Planner for Business Returns

• Organizers for Business Returns

• Enhance data entry in business returns with addition of AUTO screen

• Enhance the summary page in business returns for more efficient analysis and review

• Add W-8 and W-9 for business returns

• Enhance alerts for Schedule B related questions

Introduced Single Sign-On (SSO)—with industry-leading Ping technology—to offer an enhanced user experience across our web-based applications and services in addition to positioning for seamless roll out of new products while maintaining strong security

Federal Enhancements

• When preparing a 1040X return, the return will now be archived in the return archive manager automatically, allowing for quick storage and easy access to the originally filed return.

• Adding Form 1040-PR (Spanish form)/1040-SS (English form), Self-Employment Tax Return for residents of Puerto Rico with self-employment income who are not required to file a U.S. income tax return. These forms are used to report self-employed income derived from a trade or business in Puerto Rico and, if necessary, to pay self-employment tax to Puerto Rico on that income. The American Rescue Plan of 2021 made it so that residents of Puerto Rico are now eligible to receive the same Child Tax Credit benefit as residents of the United States.

• Adding ability to amend and file Form 1040-NR, Nonresident Alien Income Tax Return

• In conjunction with new IRS capability, we are adding the ability to e-file a superseded 1040 (this is when a return is filed after the originally filed return is accepted but before the due date.

• Implementing tax law updates, form updates, and requirements from the Inflation Reduction Act.

• Enhancements for preparing and e-filing new Schedules K-2, Partners’ Distributive Share Items – International, and K-3, Partner’s Share of Income, Deductions, Credits, etc. – International, for partnership and S corporation returns with items of international tax relevance.

​​State Enhancements

• Arkansas – Added PTE return support including e-file

• Florida – Added e-file support for 1065 and 1120X return types

• Illinois – Added e-file support for Individual Amended returns

• Iowa – Added PTE return support including e-file

• Kansas – Added the following new forms:

  • K-9 – Statement of Partnership or S Corporation of Tax Paid (Kansas’ version of a K-1) (S-Corporation and Partnership Packages)

  • K-26 – Aviation / Aerospace Credit (All Packages)

  • K-27 – Housing Investor Tax Credit (All Packages)

  • K-29 – Short-Line Railroad Infrastructure Credit (All Packages)

  • K-69 – Targeted Employment Credit (All Packages)

  • K-84 – Technical and Community College Deferred Maintenance Credit (All Packages)

  • K-91 – Teacher’s School and Classroom Supply Credit (Individual Package)

  • K-92 – Restoration and Preservation Credit (All Packages)

  • K-40SVR – Property Tax Relief for Seniors and Veterans (Individual Package)

  • Schedule FHBS – First-Time Home Buyer Savings Account (Individual Package)

• Mississippi – Added new Form 84-381, Pass-Through Entity Election, and Form 80-161, Tax Credit for Tax Paid by Electing Pass-Through Entity

• Oregon

  • Added support for Multnomah Country Preschool in Portland returns including e-file for all residency statuses

  • Added Metro Supportive Housing Services in Portland including e-file capability for all residency statuses

  • Added e-file support for all CAT (Corporate Activity Tax) packages

• Wisconsin

  • Added new additional child and dependent care tax credit support

  • Added Pass-Through Entity Representative functionality

Program Enhancements

• Enhanced Drake Software website User Account experience for customers to manage their accounts and users, purchase ancillary products, sign up for training courses, enroll in partner programs, and access support resources.

• Offered cloud-hosting through Right Networks, allowing access to Drake Tax from any supported device with an Internet connection

• Introduced the LinkBacks feature, which locates source data on the tax return

• Added the LookBack feature, which highlights fields that contained data last year and allows side-by-side comparison of current-year and prior-year data

• Implemented the DoubleCheck feature, enabling users to mark review status on the tax return

• Added fully integrated digital signature capture events with Drake E-Sign – In Person and Drake E-Sign – Online

• Added TheTaxBook WebLibrary integration to provide easily accessed links to tax and accounting research

• Added Update Manager enhancement for automatic software updates

• Provided Form 4562 Import functionality, allowing you to import transaction data into Drake Tax from a spreadsheet

• Added Drake Scheduler enhancements such as color-coding functionality and Google Calendar and Outlook Calendar synchronization

• Added and synchronized with Drake Portals

• Streamlined Drake installation and first-time setup with new Drake Tax Setup Assistant

• Added fillable Web forms for Drake Portals instead of having to rely on uploading and managing PDFs

• Redesigned preparer site for Drake Portals, which includes multi-factor authentication and new settings, backups, and reports

• Implemented security messaging during 1st time install

• Added Multi-Factor Authentication (MFA) Integration for added security and made active by default to adhere to increased security requirements

• Added new data entry toolbar

• Implemented EFIN requirements via an EFIN validator to confirm the EFIN was active and approved

• Enhanced View/Print mode with better descriptions and ability to sort K-1s

• Enhanced Fixed Asset Manager

• Added scannable QR code technology to make it easy to authenticate using an authentication app

• Accommodated new fields for exclusion of expenses relating to exempt income on Form 1120-H

• Prevents unnecessary retransmits of returns by providing “Pending” acknowledgements (“P”- Acks) for returns that have already been e-filed and pending IRS/State acceptance.

• Prevents out-of-date returns from being accidently transmitted by removing returns from the EF queue which have had changes made to them after they were added to the queue.

• Added Batch-Printing functionality for labels, envelopes, and postcards

• Enhanced Client Search dialog window

• Integrated new Online Help features inside Drake Tax to take users directly to program Help information online and Knowledge Base articles

• Implemented bulk e-file functionality for W-2/W-3 forms to the Social Security Administrations

• Integrated with Drake Portals to import client data into Drake Tax reducing or eliminating the need for data entry

• Added ‘Test Account’ button in Setup to allow customers to make sure account information in synchronized with Drake Software

• Provided ability to e-File directly from View/Print mode

• Added 15 customizable client statuses our customers can use to track and manage office workflow

• Added visual indicators to documents and forms that can be uploaded to and electronically signed using Drake Portals in View/Print mode with a “pen” icon to make it easier to find, sign, and submit eligible documents to the preparer’s portal

• Allowed customization of the prior-year state form print order

• Added additional security options to select whether to prevent preparers from accessing returns outside of their respective firms

• Various Drake Portals enhancements to user experience, including seamless integration with Web1040, our web-based professional tax software for individual returns.

• Expanded the data entry search to search for not only screens but data entries as well

Federal Enhancements

• Integrated requirements and enhancements for the Additional Child Tax Credit (ACTC), Child Tax Credit (CTC), and Other Dependent Credit (ODC) using a reworked Schedule 8812

• Added new Health Care screens to ease data entry for ACA reporting requirements

• Added new State and Local Tax (SALT) Worksheet with a calculation breakdown optimizing state refunds

• Provided Qualified Business Income (QBI) worksheets to explain amounts that go into QBI and allow precise data entry overrides

• Added Married Filing Jointly (“J”) option for screen FRGN for FinCEN Form 114 Reports to automatically generate two reports, one for taxpayer and one for spouse

• Implemented “Virtual Currency” questions and requirements

• Important Form 1040 redesigns such as Form 1040 Schedules 1 through 6.

• Updated with various annual tax law updates, form updates, and requirements

• Implemented multitude of changes related to the PATH Act including temporary ITIN returns

• Implemented multitude of changes required by the Bipartisan Budget Act and Tax Cuts and Jobs Act (TCJA), such as major Form 1040 changes, reduced exemption amounts, Form 8995, Form 8997, and the NOL rule changes

• Updated TCJA return requirements as dictated by the CARES Act, which deprecated some preceding TCJA policies

• Added an EF Notice for accepted extensions

• Accommodated and modified tax program expectations due to extended federal filing deadlines in different tax years

• Added EF Notice for FBAR filings

• Added PPP loan requirements, such as the addition of PPP loan election and statement

• Enhanced the ‘DBA’ line for entities to be used to expand the entity name

• Added customizable option on MISC screen to not update the client to next tax year

• Accommodated new and enhanced forms: 8990, 8991, 8992, 8993, 8994, 8996, 965, 5471, 1118

• Implemented changes required for Sec. 199A deduction

• Added disaster designation support on MISC screen

• Implemented new Ohio RITA functionality on Form W2

• Added new Tax and Payment (TAX) screen for Form 1065

• Added sort and view order customization for K-1s

• Implemented new Form 1040-SR, U.S. Tax Return for Seniors

• Provide ability to print or omit the taxpayer and spouse telephone and email address on Form 1040 globally for all returns

• Added Form 4506-T, Request for Transcript of Tax Return to order a client’s transcript from the IRS free of charge

• Added Recovery Rebate Credit (RRC) screen to help calculate any RRC (aka, Economic Impact Payment) for which a taxpayer might be entitled

• Adjusted Form W-2 calculations automatically for employees that deferred Social Security payments from their wages in 2020

• Implemented and enhanced Form 1099-NEC, Nonemployee Compensation

• Guided users through the advantages and provisions of the CARES Act which allowed tax-free withdrawals from retirement plans via Form Family 8915

• Added professionally Spanish translations for many Federal tax forms

• Added e-File capability for Federal Amendments, Form 1040-X, Amended U.S. Individual income Tax Return

• Provided support for Health Coverage Tax Credit (HCTC) Extensions beginning in 2020 via Form 8885, Health Coverage Tax Credit

• Added e-Signature support for all Business Packages so now partners, shareholders, and business owners can electronically sign returns

• Added the Filing Security Information screen (SEC) as part of an IRS initiative to protect businesses and tax return preparers from data theft and tax fraud

• Added Global Auto-balance feature for Schedule L

• Added capability to e-file multiple Forms 7004 from Drake Tax with the same ID number preventing “dupe” rejects

• Added new K1E screen to enter all information for all shareholders and business officers to help prevent confusion

• Added e-File capability for Form 990-T, Exempt Organization Business Income Tax Return. Per IRS mandate, all 990 returns must now be e-filed

• Added e-File capability for Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42

• Added capability to e-file multiple Forms 8868, Application for Automatic Extension of Time to File an Exempt Organization Return from Drake Tax with the same ID number preventing ‘dupe’ rejects

• Added support for new IRS Form 9000 allowing taxpayers with print disabilities to receive communications from the IRS in accessible, non-print, or enhanced-print format.

• Added K-1/K-3 Export feature in View/Print mode to export data into an existing client return to a new 1116 screen.

• Accommodated new Form 2441 requirements for Child and Dependent Care Credit to make it refundable

• Accommodated the expansion of allowable meal expenses per the Consolidated Appropriations Act of 2021 providing for a temporary exception to the Section 274(n) 50% limitation for business expenses paid after 2020 and before 2023 for food provided by restaurants

• Added new Schedule C (E) Comparison Worksheets, “Comparison Sch C (E)”, so customers can easily compare current year vs prior year Schedules C and E

• Added comprehensive Preparer Due Diligence questions (screen DD1) to help the preparer collect more thorough taxpayer information and provided an option to make this screen a required entry in returns in the Setup options\

• Provided an option to claim the Foreign Tax Credit (FTC) direction on Form 1040 without having to access or file Form 1116 for eligible taxpayers

Peripheral Enhancements

• Added customizable questionnaires on Client Organizers so our customers can fine-tune organizers for their clients

• Added fillable PDF functionality for organizers and proformas

• Allowed the ability to edit the print form order for organizers and proformas

• Added comprehensive filing instructions for more than 20 federal forms in addition to the standard main package forms, extensions, and amendments which dictate specific filing needs

• Designed new TCJA Client Letter

• Added new customizations for letterheads

• Added a new Condensed organizer

• Enhanced default client communications to show e-file information prior to needing to clear all EF messages from the return

State Enhancements (All)

• Added State Extension screen (STEX) to help centralize and generate all city and state extensions

• New COMP (Compare) Screens added to state packages to compare current year vs two prior years

• Simplified TCJA and CARES Act data requirements across states for Form 461 Limitations by providing screen 461 for decoupled states

• Accommodated and modified tax program expectations due to extended State filing deadlines across in different tax years

State Enhancements (Individual)

• Alabama – Added support for Electing Pass-through Entity Payment Return

• Arizona

  • Added SBI Forms and e-File capability

  • Added Business Return e-File capability

• Arkansas

  • Added Form AR8944 Preparer Hardship Waiver of EF

  • Supported depositing of tax refund in multiple bank accounts

  • Added Amended return e-Filing capability

  • Added Extension return e-Filing capability

  • Added ES Voucher e-Filing capability

  • Added Direct Debit for Balance Due returns for all packages

  • Added Forms and e-Filing capability for:

    • AR2441 Child Care Credit (2021 IND)

    • AR8944 Preparer Hardship Waiver of EF (2021 IND, CRP, SBS, PTR, FID & NRC)

    • ARK1, ARK1FE (2018 PTR, SBS & FID)

    • AR2106, AR3903, AR4684, and several attachments (2018 IND)

    • AR1100WH (2017 CRP, SBS)

    • ARSLWS Student Loan Interest Schedule (2017 IND)

    • ARSEWS Self-Employed Health Insurance Deduction (2017 IND)

    • Teachers Qualified Classroom investment Exp (2017 IND)

    • AR1000CR Non-Resident Composite (2016 to PTR & SBS)

• California

  • Added e-Filing capability for:

    • Certain Single Member LLCs, Form 568, produced in the individual package

    • Amended corporation and S corporation returns, Form 100X

    • Amended individual returns, 540 and 540-NR with an attached Schedule X

    • Form 199, Exempt Organization Annual Information Return prepared in the Corporation package

  • Added support for new forms:

    • 3814, New Donated Fresh Fruits or Vegetables Credits (replaced 3811)

    • Schedule X, Amended Return Schedule (replaced 540X)

    • 3520 RVK, Power of Attorney Declaration Revocation

    • 3534, Tax Information Authorization

    • 3535, Tax Information Authorization Revocation

    • CA2106, California Recalculation of Employee Business Expenses

    • CAWK_A, Proforma Federal Itemized Deductions

    • CAWK_MOV, Moving Expense Worksheet

    • CA-COMP, Three-Year State Tax Return Comparison

    • Form 3461, California Limitation on Business Losses

    • Form 3568, Alternative Identifying Information for the Dependent Exemption Credit – Added for dependents that qualify for CA Dependent Exemption Credit but are not eligible for an ITIN or SSN.

    • Form 3849, Premium Assistance Subsidy

    • Form 3853, Health Coverage Exemptions and Individual Shared Responsibility Penalty

    • Form 3866, Main Street Small Business Tax Credit

    • Form 4197, Information on Tax Expenditure Items – Added to report expenditure items as part of the FTB’s annual reporting requirements under CA R&TC Section 41.

    • Form 3804, Pass-Through Entity Elective Tax Calculation

    • Form 3804-CR, Pass-Through Entity Elective Tax Credit

    • Form 3913, Moving Expense Deduction

• Colorado – Added support for ITIN and foreign addresses

• District of Columbia

  • Enhanced DC Combined return

  • Added:

    • Schedule SR – Small Retailer Property Tax Relief Credit, including multiple members using the credit

    • D-8609 - DC Low-Income Housing Tax Credit

    • Capital Gains Deferred for investment in DC Qualified Opportunity Fund

• Indiana – Added support for Property Tax Return

• Iowa – IA102 allowed Amended E-file in PER/SBS/FID packages

• Kansas

  • Added KS-44 Qualified Vendor Credit

  • Added K-43 Eisenhower Foundation Credit

  • Added K-46 Friends of Cedar Crest Association Credit

  • Added K-48 Qualified Charitable Distribution Credit

• Kentucky

  • Added support for the KY725 Individual LLC package along with e-file for the KY725

  • Added e-file capability for Corporation and S-Corporation packages

• Maine – Added e-Filing capability for Amendments

• Maryland – Added support for MD Form 511 Pass-Through Entity Election Income Tax Return

• Massachusetts

  • Added direct debit for estimated payments in all packages

  • Added Paid Family and Medical Leave worksheet

  • Added Unemployment Exclusion worksheet

  • Added 2210 auto-generate setup option

  • Added Taxable IRA distributions worksheet

  • Added MA Tax exempt package

  • Added MA 63d-ELT Entity Level Tax Return

• Minnesota – Add support for Pass-through Entity Tax Return

• Mississippi – Added business extension e-Filing capability with payments

• Missouri

  • Added Direct Debit functionality for balance due returns

  • Added e-File support for Kansas City RD-108 and RD-109

• Montana

  • Form PTE, combining former separate partnership and S corporation packages into one shared programming package

  • Form PTE Apportionable Income Worksheet (MTWK_AI~)

  • Form NOL series for 2020 such that 3 years could be worked on for the year with supporting schedules

  • Montana Additional Income and Adjustment to Income Worksheet (MTWK_AI)

  • e-Filing for Fiduciary returns

• Nebraska

  • Added support for e-File of business packages

  • Added the Property Tax Credit and the credit for Purchase of a Nebraska Residence in a Designated Extremely Blighted Area

• New Jersey – Added support for PTE package

• New Mexico – Added the Solar Market Development Credit and the Sustainable Building Tax Credit

• New York

  • 1120S package – Functionality was added to the New York S-Corporation package to allow companies filing a Federal 1120S, U.S. Income Tax Return for an S Corporation, the option to file a New York CT-3, General Business Corporation Franchise Tax Return, in the S Corporation package.

  • In-House worksheet NY_PNSN~ was added to show the calculation of the New York State subtractions from income for the NY State/Government Pensions and the NY Pension Exclusion.

  • E-Filing of New York State Form IT-2105, Estimated Tax Payment Voucher for Individuals

  • E-Filing of New York City Form NYC-400, Estimated Tax Payment Voucher for Business Corporations and Subchapter S General Corporations

  • E-Filing of New York City Form NYC-UBTI, Declaration of Estimated Unincorporated Business Tax

  • E-Filing of New York City Form NYC-UBT, Partnership Declaration of Estimated Unincorporated Business Tax

  • E-Filing of New York State Form CT-300, Mandatory First Installment (MFI) of Estimated Tax for Corporations Worksheet NYITMADD, Addition Worksheet for Form IT-196, NYS Itemized Deduction Schedule, which now includes an automatic calculation for disallowed union dues and the amortization of bond premiums subject to New York State income tax

  • Worksheet NY_S201, Small Business Modification Subtraction Worksheet, to show the calculation of subtraction modification S-201, Small business modification

• North Dakota – Added support for e-Filing of Amendments

• Ohio

  • Added support for MNP10 Municipal Net Profit Tax Return

  • Added e-Filing capability for OH RITA Form 27

• Oklahoma

  • Added Form 588, First time Home Buyer Savings Account Holder and Designated Beneficiary form

  • Added Form 566, Credit for Qualified Software or Cyber Security Employees

• Oregon

  • Added ability to e-file Amended returns

  • Added ability to e-file Composite returns and added Corporate Activity Tax (CAT) to Per, SBS and PTR packages

  • Added e-file to Portland ARTS and combined tax returns and added CAT to CRP and FID packages

• Pennsylvania

  • Added support for:

    • EF of Philly School Income Tax Amended SIT (2021 IND only)

    • EF of Philly Amended BIRT/BIRT-EZ (2021 IND, CRP, SBS, PTR)

    • EF of Philly Amended Net Profits Tax (2021 IND, PTR)

    • Form Philly School Inc Tax Extension (2021 IND, CRP, SBS, PTR, FID)

    • Form and EF of PA1882 – Health Insurance Coverage (2021 IND)

    • EF of PANRC Non-Resident Composite in SBS & PTR (2020)

    • PA8453N e-File Signature form for PANRC (2020 PTR & SBS)

    • PAN_PDF~ Binary Attachments for PANRC (2020 PTR & SBS)

    • Philly BIRT No Tax Liability (2020 IND, CRP, SBS, PTR, FID)

    • Special No Tax Liability Treatment to BIRT/BIRT-EZ (2020 IND, PTR, SBS, PTR, FID)

    • PA Local Voucher (2020 IND)

    • In-House 8829 worksheet calculations and attachments for PAUE, PARK1, PANRK1, PAC, PAE, & PAF (2020 IND)

    • Forms, attachments and EF of PAC, PAE & PAF (2018 FID)

    • Forms and EF of REV-1834 Schedule C-8 & C-9 (2018 CRP & SBS)

    • Form and EF for PAP Donation to 529 plan (2016 IND)

    • Attachments for PALOCAL lines 5 and 6 (2016 IND)

    • EF of Philly School Income Tax (2016 IND)

  • Enhanced:

    • PASP Special Tax Forgiveness from non-scannable 1-page form to a scannable 2-page form (2020 IND)

    • PA20S65 Schedule NW Non-Resident withholding from a non-scannable 1-page form to scannable 2-page form (2020 PTR & SBS)

    • PAM from a non-scannable 2-page form to scannable 2-page form (2020 PTR & SBS)

    • PAUE from non-scannable 2-page form to scannable 2-page form (2020 PTR & SBS)

    • PAOC Other Credits form from non-scannable to scannable (2020 IND)

    • PAGL Credit for Taxes Paid form from non-scannable to scannable (2020 IND)

    • PA1000RC Prop. Tax Renter’s Certificate from non-scannable to scannable (2020 IND)

• Rhode Island – Implemented e-Filing capability for FID

• Utah – Added payment e-Filing capability

• Vermont – Added VT RCC-146 Renter’s Credit Claim