Anyone know if the support test includes the value of the living space? Like if mother in law has her own bedroom in our house, do we count what that room would rent for as part of our support contribution?

Based on what you've described, you have a good chance of being able to claim your mother-in-law as a dependent! The key factors working in your favor are that you're providing more than half her support (housing, food, utilities, cell phone) and she's living with you for more than half the year. The main thing to watch out for is the gross income test. Her Social Security payments ($1,450/month) may not all count toward the income limit if she's not required to file a tax return, but you'll need to include the full amount of her 401K distributions ($600/month = $7,200 annually). Since the gross income limit is $4,400 for 2024, those 401K distributions alone would exceed the threshold. I'd recommend consulting with a tax professional or using IRS Publication 501 to determine exactly how much of her Social Security income needs to be counted. The rules around Social Security taxation can be complex and depend on her total combined income from all sources. Also keep detailed records of all the support you provide - housing costs, food, utilities, medical expenses, etc. You'll want to be able to demonstrate that your contributions exceed 50% of her total support if the IRS ever asks for documentation.

This entire discussion has been incredibly valuable! I'm jumping in as someone who's been doing tax prep for about 4 years but only in my home state of Pennsylvania. Reading through all these experiences has made me realize I've been missing out on potential business opportunities because I wasn't sure how to handle multi-state clients properly. The consensus around pursuing EA credentials really makes sense, especially given how complex the state-by-state requirements seem to be. @Logan's timeline of 8 months for studying seems reasonable, and I appreciate @Norman's suggestion about being transparent with clients during the transition period. I'm particularly concerned about the professional liability insurance aspect that @KaiEsmeralda raised. I need to call my insurance provider this week to understand what my current policy actually covers geographically. It would be terrible to think I'm properly covered only to find out there are limitations when an issue arises. One practical question for those who've made this transition: how do you handle the business development side? Do you actively market your multi-state capabilities once you have the proper credentials, or do you wait for existing clients to move and ask for help? I'm wondering if there's a proactive way to build this part of the practice or if it's mostly reactive to client relocations. Thanks to everyone for sharing such detailed experiences - this thread has given me a clear roadmap for expanding my practice responsibly!

As a newer preparer who's been following this discussion closely, I want to add my perspective on actually implementing some of these recommendations. After reading through everyone's experiences, I decided to test out both taxr.ai and start researching the EA path simultaneously. I used taxr.ai for three states where I have potential clients (Virginia, North Carolina, and Florida) and was impressed with how detailed the analysis was. It not only told me Virginia requires registration with their Board of Accountancy for tax preparers, but also provided specific forms and timelines. For Florida, it confirmed no state requirements beyond PTIN, and for North Carolina, it flagged some nuanced rules about business vs. individual return preparation that I wouldn't have known about. What really sold me on the EA route was realizing that even with perfect state-by-state compliance, I'd still be constantly researching and tracking requirements as they change. The EA credential seems like it future-proofs your practice against regulatory changes and gives you credibility that clients recognize. I'm starting with Gleim study materials for Part 1 of the EA exam and have already found a local study group through NAEA. The investment in time and money feels significant now, but after seeing the complexity everyone has described, it seems like the smartest long-term approach for anyone serious about multi-state practice. Thanks to everyone who shared their experiences - this thread has probably saved me months of trial and error!

As someone who went through this exact nightmare last year, I can confirm that the systematic approach outlined in this thread really works! I had $3,100 in payments that disappeared into the IRS system after switching from MFS to MFJ. The Twitter/X strategy was a game-changer for me - got responses from both @PayUSATax and @Pay1040 within 36 hours, which was incredible after weeks of failed phone calls and ignored emails. They asked for my confirmation numbers via DM and provided the IRS reference numbers within 2-3 business days. One tip I'd add: when you do reach the accounts management line at 800-829-0922, ask them to put notes in your account about the payment allocation issue. If you need to call back later, the next rep can see the previous conversation and pick up where you left off instead of starting from scratch. The payment history transcript is absolutely crucial - it's basically your official proof of where everything went. Make sure to request both the current year transcript AND the amended return transcript if applicable. It's honestly criminal that there's no warning about this payment limbo issue during the MFS to MFJ amendment process. This thread has probably helped more people solve this problem than any official IRS guidance! Keep sharing your success stories - it really helps people realize this nightmare is solvable with the right approach.

This entire thread has been absolutely invaluable! I'm new to this community but found myself in the exact same situation - filed MFS for 2023, made payments through PayUSATax and Pay1040, amended to MFJ, and now have a mysterious $2,800 credit that the IRS can't explain. The "payment limbo" concept finally makes everything click. It's incredible that this MFS to MFJ amendment issue is so widespread yet completely absent from any official warnings or documentation. This community has essentially reverse-engineered a solution to a problem the IRS won't even acknowledge exists! I'm going to follow the proven systematic approach that's worked for so many people here: 1. Start with Twitter/X outreach to @PayUSATax and @Pay1040 with general inquiry about payment allocation 2. Use the early morning phone strategy (8:15 AM + 0-0-0 trick) as backup 3. Call accounts management at 800-829-0922 once I have reference numbers 4. Request payment history transcript AND amended return transcript for documentation The tip about asking accounts management to put notes in your file is genius - that could save hours if follow-up calls are needed. And hearing that people are getting Twitter responses in 24-48 hours gives me hope after weeks of radio silence from traditional customer service. Thanks to everyone who shared their strategies and success stories. This thread should honestly be pinned as a resource guide for anyone dealing with payment processor tracking issues during filing status changes!

Pro tip: Sign up for text alerts with SBTPG. At least youll know the second they get it

Just wanted to add that you can also check your IRS transcript on the IRS website to see exactly when your refund gets processed and released. It'll show a 846 code when the money actually gets sent out to SBTPG. Usually takes them 1-2 business days after that to deposit it in your account. The transcript is free and way more detailed than WMR!

This thread has been incredibly educational! I'm a small business owner and realized from reading all these comments that we might be making the same mistake with our employees' cell phone reimbursements. We currently include them in taxable wages because our accountant told us it was "safer" that way. After seeing the references to IRS Notice 2011-72 and Publication 15-B, I'm going to review our policy. We do have legitimate business reasons for providing phone reimbursements - our field staff need to be reachable for job site issues and customer emergencies. It sounds like we could be saving both our company and our employees money by properly classifying these under an accountable plan. For those who successfully got their employers to fix this - did your companies face any issues or pushback from their tax advisors or payroll companies when making the change? I want to be prepared for any resistance when I bring this up with our accounting firm. Sometimes external advisors can be overly conservative about tax positions, even when the law is clear. Thanks to everyone who shared the specific IRS citations and practical advice. This is exactly the kind of real-world tax guidance that's hard to find elsewhere!

As someone who recently went through payroll training, I wanted to add that many companies make this mistake because they're not familiar with the "primarily for noncompensatory business reasons" test that Victoria mentioned. The key distinction is whether the employer provides the phone/reimbursement for their own business convenience versus as additional compensation to the employee. In your case, Maggie, being in sales and needing to take client calls clearly falls under business convenience - your employer benefits from having you accessible to clients, not just giving you extra money. This is exactly the scenario the IRS had in mind when they simplified these rules. One practical tip: when you approach HR, ask them what documentation they currently require for the reimbursement. If they're already having you submit bills or justify business usage, that shows they understand there's a business purpose. If they're just giving flat payments without any substantiation, that might explain why they treated it as taxable - but it also means they should implement proper accountable plan procedures going forward. Also, don't be discouraged if the first person you talk to doesn't immediately understand the issue. Sometimes you need to work your way up to someone with more tax knowledge or decision-making authority. The important thing is having all that documentation everyone mentioned ready to support your case.