Schedule K-1 Needed to Support MD Capital Gains?

Zapatarot
Zapatarot Member Posts: 2 Newcomer
in State Filing

The MD State portion of the software wants me to upload Schedule K-1 to support the new Capital Gains tax. I don't understand why this is needed because all of my capital gains are from personal investment accounts. Anyone else having this issue?

Answers

  • kiarab
    kiarab FreeTaxUSA Agent Posts: 263 image
    Hello Zapatarot,

    I would recommend that you contact customer support about this. They should be able to see your account and see why you are being asked to upload a Schedule K-1. It may be that something was marked by accident.

    I do know that MD has a page titled "MD Capital Gains" in our software and the first line is asking about your Maryland Schedule K-1. However, it is just asking how much of your capital gains is from a source like that. If none of them are from a Maryland Schedule K-1, you can just enter a 0 in the space provided.
  • sebni
    sebni Member Posts: 1 Newcomer

    Hi Zapatarot,

    I'm having the same issue! I need to file in two states, but the MD portion of the return lists the full federal capital gains as MD income (no matter what I enter on the page for that) and it forces me to upload a Schedule K-1 although all my gains are from personal investments.

    I reached out to support and they told me that "I have to file a paper return and cannot e-file because I entered that I have federal capital gains". It feels incorrect and like a glitch in the software to me though and hope they can resolve it.

    Have you been able to figure it out?

  • Zapatarot
    Zapatarot Member Posts: 2 Newcomer

    Hi everyone-

    I contacted the FTU support team and received the following response:

    "I am sorry for the issue you have run into with your MD return and the alert you were given to attach a Maryland Schedule K-1 (510/511).

    This is indeed an error with the software, and you shouldn't need to attach anything.

    The good news is that our team is working on a fix for this, and it will be fixed 2/20/2026.

    If you can come back at that time, you will not be asked to upload anything, and you can submit your returns."

    Hopefully the issue will be resolved by the end of this week.

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