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The joint client merge feature is a valuable tool designed to merge client data from two separate returns into one client. From that client, you can calculate the return as married filing joint, or for state purposes, as a domestic partnership.

Merging individual clients provides:

• an easy way to combine client data without having to create a new joint return from scratch.
• a means of filing a joint state return for domestic partnerships, state-only marriages, and civil unions. 
• a printable report containing critical errors and/or warnings with regard to any items within the individual returns that were unsuccessfully merged or require additional action from the preparer.

Merging individual clients is particularly useful when:

• a state permits joint tax treatment.

  Note: Federal returns are not eligible to be filed jointly for domestic partnerships or civil unions.

• two taxpayers within your database of clients marry, rendering them eligible for a married filing joint status.

Merging individual clients for married filing joint and new domestic partnership returns

Use this procedure to merge the client data from two individual clients into one joint client for purposes of filing a married filing joint or domestic partnership return.

1. Complete each individual return for the taxpayer and spouse/partner, including specifying for each individual return a filing status of single, married filing separately, head of household, or qualifying widow(er), as applicable, in Screen 1040.

   The separate returns used in the merge process to create a joint domestic partnership return should be completed to the point of being ready to file for federal purposes prior to merging. All state data entered in the state tax and Client Organizer screens must be entered in the joint client after merging.

   The separate returns used in the merge process to create a joint individual return do not need to be completed to the point of being ready to file for federal purposes prior to merging. Federal data can be entered in tax or Client Organizer screens in the joint client after merging or in the separate clients before merging. State data must be entered in state tax or Client Organizer screens in the joint client after merging.

2. After each individual return is completed as necessary, choose File > New Client to open the New Client dialog.
3. In the General information group box, select a preparer (if applicable), and enter a unique client ID for the new joint client you are about to create.

4. In the Entity information group box, click the 1040 option and select Domestic Partner from the 1040 drop-down list. If the clients you're merging are two individuals who will file a married filing joint return, you still need to select Domestic Partner from the 1040 drop-down list. After the joint client is created in step 12, you will change the return type for the joint client from Domestic Partner to an Individual return.

   After changing a Domestic Partnership return to an Individual return, the return type cannot be changed back to a Domestic Partnership return.

5. Click the Add State(s) button to add a state return to the joint client, if applicable. If you don't see the state you'd like to add, it is likely that state does not allow Domestic Partner returns. If you're merging two clients to file a married filing joint return, you can add those states once you have changed the return type in step 12.

6. Click the Advanced Properties button to open the Advanced Properties dialog, then click the Domestic Partners tab.
7. In the Domestic Partners tab, highlight the taxpayer's client in the client list and click the Select Taxpayer button. Then highlight the spouse's client in the client list and click the Select Spouse button.
8. If the new joint client will be used to prepare a Domestic Partnership return, check the Separately list individual returns in DPR transmittal letter checkbox if you would like the list of returns to appear in the Transmittal Letter.
9. Click OK to close the Advanced Properties dialog.
10. In the New Client dialog, click OK to begin the merge process.

11. If critical errors and/or warnings are generated during the merge process, the Merge Client Data Results dialog opens detailing those critical errors and/or warnings. Critical error messages should be addressed by the preparer before proceeding with the merged client. Warning messages are generally informational and may not require additional attention from the preparer.

    Note: To print the list of critical errors and/or warnings created during the merge process, click the Print button in the Merge Client Data Results dialog.

    Do one of the following:

    • If the Merge Client Data Results dialog did not open, there were no critical errors or warnings and the merge is complete. Proceed to the next step.

    • If critical errors were generated and you want to resolve those critical errors before completing the merge, perform these steps.

      1. If desired, click the Print button to print the list of critical errors and warnings.
      2. In the Merge Client Data Results dialog, click Cancel. This will delete the new domestic partner (joint) client you tried to create.
      3. UltraTax CS notifies you that the new joint client failed to initialize. Click OK.
      4. Open the appropriate taxpayer and/or spouse client, address the critical errors, and close the client(s) after the critical errors are resolved.
      5. Repeat Steps 3-10 to re-create the domestic partner (joint) client.
    • If critical errors were generated and you want to ignore the critical errors, click OK to complete the merge, and then proceed to the next step. UltraTax CS will generate a diagnostic message in the merged client when unresolved critical errors still exist.
    • If only warnings were generated, click the Print button to print the list of warnings, if desired, click OK to complete the merge, and then proceed to the next step.

12. The new joint client will open when the merge is complete. If the new joint client will be filed with a status of married filing joint and not as a domestic partnership, choose File > Client Properties, select the desired Individual return type from the 1040 drop-down list, and click OK to close the Client Properties dialog. If a warning message requires additional attention, make the necessary changes in the new joint client.

    If you recombine data from taxpayer and spouse clients into an existing joint client, any changes made to federal data in the existing joint client will be overwritten.

    After changing a Domestic Partnership return to an Individual return, the return type cannot be changed back to a Domestic Partnership return.

In some situations, the default merge rules listed above do not apply. UltraTax CS assumes the following default merge behavior for the following forms and screens.

Recombining taxpayer and spouse clients into an existing married filing joint or domestic partnership return

If individual taxpayer and spouse clients are merged into a joint client, and information in the taxpayer or spouse client changes after the clients are merged, the taxpayer and spouse client data can be recombined into the joint client. Use this procedure to recombine client data from the taxpayer and spouse clients into their joint client for purposes of filing a married filing joint or domestic partnership return.

If you are recombining proforma'd domestic partner clients and want to preserve carryover amounts, see the Working with proforma'd domestic partner clients to preserve carryover amounts section before proceeding.

Recombining data from taxpayer and spouse clients into an existing joint client will overwrite any changes made to federal data, including State if different fields, in the existing joint client. You can enter new information manually into the joint client instead of recombining the data to avoid overwriting information specific to the married filing joint client, such as amounts entered for section 179 elections.

1. Open the joint client whose individual taxpayer and spouse client data you want to recombine.
2. Choose File > Client Properties to open the Client Properties dialog.
3. Click the Advanced Properties button to open the Advanced Properties dialog, then click the Domestic Partners tab.
4. In the Domestic Partners tab, the joint client's taxpayer and spouse clients are already selected. Verify that the selected taxpayer and spouse clients are the proper clients. If necessary, select a different taxpayer and/or spouse client.
5. Mark the Recombine the federal data of the taxpayer and spouse clients checkbox, and click OK to close the Advanced Properties dialog.
6. If you are recombining proforma'd domestic partner clients as described in the Working with proforma'd domestic partner clients to retain carryover amounts section, mark the Retain prior year carryover amounts when re-combining current year data checkbox.
7. In the Client Properties dialog, click OK to begin the recombine process.
8. If the new joint client will be used to prepare a Domestic Partnership return, check the Separately list individual returns in DPR transmittal letter checkbox if you would like the list of returns to appear in the Transmittal Letter.

9. If critical errors and/or warnings were generated during the recombine process, the Merge Client Data Results dialog opens detailing those critical errors and/or warnings. Critical error messages should be addressed by the preparer before proceeding with the merged client. Warning messages are generally informational and may not require additional attention from the preparer.

   Note: To print the list of critical errors and/or warnings created during the recombine process, click the Print button in the Merge Client Data Results dialog.

   Do one of the following:

   • If the Merge Client Data Results dialog did not open, there were no critical errors or warnings and the recombine process is complete.

   • If critical errors were generated and you want to resolve those critical errors before completing the recombine process, perform these steps.

     1. If desired, click the Print button to print the list of critical errors and warnings.
     2. In the Merge Client Data Results dialog, click Cancel.
     3. UltraTax CS notifies you that the joint client failed to initialize. Click OK.
     4. Open the appropriate taxpayer and/or spouse client, address the critical errors, and close the client(s) after the critical errors are resolved.
     5. Choose File > Open Client and open the domestic partner (joint) client you tried to recombine.
     6. UltraTax CS notifies you that domestic partner client was not successfully combined and asks if you want to recombine the client. Click Yes. The Advanced Properties dialog opens.
     7. Verify that the selected taxpayer and spouse clients are the proper clients. If necessary, select a different taxpayer and/or spouse client. When you have verified that the selected taxpayer and spouse clients are the proper clients, click OK to close the Advanced Properties dialog.
     8. In the Client Properties dialog, click OK to recombine the clients, and then return to step 8.
   • If critical errors were generated and you want to ignore the critical errors, click OK to complete the recombine process. UltraTax CS will generate a diagnostic message in the merged client when unresolved critical errors still exist.
   • If only warnings were generated, click the Print button to print the list of warnings if desired, and click OK to complete the recombine process.

Working with proforma'd domestic partner clients to retain carryover amounts

When processing domestic partner returns that were proforma'd from the prior year, all three returns related to the merge - the individual taxpayer, individual spouse, and merged domestic partner return - must be proforma'd to preserve the joint carryover amounts calculated in the prior year.

1. Proforma all three related prior-year returns: the individual taxpayer return, individual spouse return, and the merged domestic partner return.
2. In the proforma'd individual taxpayer and spouse federal returns, enter the current-year federal data.

3. Recombine the individual taxpayer and spouse returns as described in the Recombining taxpayer and spouse clients into an existing married filing joint or domestic partnership return section.

   Note: The items listed in the table below will be retained in the merged client upon recombining the individual returns.

   Input screen	Amounts retained
   1099Q	Basis of this account on 12/31/2017 field
   1116CO	All 2008-2017 foreign tax credit carryover information fields
   2106	Section 179 carryover fields
   2Yr	All fields on the screen
   3468	Investment credit and Rehabilitation credit prior year passive credit carryover fields
   4835-2	Section 179 carryovers, Excess Farm Loss, and all passive activity carryover fields
   8801	All fields on the screen
   8829	Carryovers for Operating expenses, Casualty loss CO holding period, and Depreciation. This information is entered on the assets Home Office tab.
   8903	All fields in the Prior Year Suspended Deduction section
   8910	Prior year passive credit carryover fields
   8911	Prior year passive credit carryover fields
   8936	Prior year passive credit carryover fields
   8941	Prior year passive credit carryover fields
   C-3	Section 179 carryovers, Excess Farm Loss, and all passive activity carryover fields
   CO	All fields on the screen
   CO6765	All fields on the screen
   COGBCr	All fields on the screen
   Cr-2	Certain retirement distributions received for tax year (including extensions) 2017 and 2016 fields
   CrBus	All Prior year passive credit carryovers fields and Research expenses for prior 3 yrs fields
   CrBus2	All Prior year passive credit carryovers fields
   CrBus3	All Prior year passive credit carryovers fields and Indian employment credit recapture field
   CrBus4	All Prior year passive credit carryovers fields and New markets credit recapture field
   CrBus5	All Prior year passive credit carryovers fields
   F-3	Section 179 carryovers, Excess Farm Loss, and all passive activity carryover fields
   History	All fields on screen
   IRA	Traditional IRA basis, Roth IRA contribution basis on 12/31/2017, and Roth IRA conversion basis 12/31/2017 fields
   K1-7	Section 179 carryovers, Excess Farm Loss, and all passive activity carryover fields
   K1-St	Section 179 carryovers, Excess Farm Loss, and all passive activity carryover fields
   PALCrCO	All Prior year passive credit carryovers fields
   K1T-3	Section 179 carryovers and all passive activity carryover fields
   NOLCO	All fields on the screen
   Pen	2017 Tax fields
   Rent-2	Section 179 carryovers and all passive activity carryover fields

4. In the domestic partner return, enter current-year state-specific data in the applicable state input screens.

Related topics

• Filing Status Optimization utility FAQs
• 1040 - Common questions

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