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TurboTax Desktop doesn't properly transfer military pension to state return

I'm a military retiree living in Oregon. Oregon doesn't tax federal service pensions earned before 1991. I've had no problems with this in previous editions of TurboTax, but the 2023 edition isn't handling my situation correctly. I have entered my military pension on the income portion of my federal return, and when the program transfers that number to my Oregon return, it won't let me identify when my service was completed, so my pension is taxed as normal income. I could be doing something wrong, or there could be a glitch in TurboTax 2023. 

 

Any advice or recommendations will be greatly appreciated. Thanks!

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1 Best answer

Accepted Solutions
DMarkM1
Expert Alumni

TurboTax Desktop doesn't properly transfer military pension to state return

You are correct.  OR excludes pensions earned for service prior to October 1991.  Edit your 1099R entries in the Federal interview "Wages & Income" section.  After entering the form information you should arrive at a page asking "Where is this distribution from?"  There you should select the "Federal Retirement" option. 

 

On the next page identify the military retirement as "Non-qualified" and complete the section questions.  

 

Next you should continue your OR state return and "Update" the "Income" section.  There you should now be asked to select an option for federal service prior to October 1991. This should open the questions for your service period and exclude the pension amount earned prior to October 1991.  

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2 Replies
DMarkM1
Expert Alumni

TurboTax Desktop doesn't properly transfer military pension to state return

You are correct.  OR excludes pensions earned for service prior to October 1991.  Edit your 1099R entries in the Federal interview "Wages & Income" section.  After entering the form information you should arrive at a page asking "Where is this distribution from?"  There you should select the "Federal Retirement" option. 

 

On the next page identify the military retirement as "Non-qualified" and complete the section questions.  

 

Next you should continue your OR state return and "Update" the "Income" section.  There you should now be asked to select an option for federal service prior to October 1991. This should open the questions for your service period and exclude the pension amount earned prior to October 1991.  

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

TurboTax Desktop doesn't properly transfer military pension to state return

Thank you! Following your instructions, I went back through the Income section and discovered that I'd inadvertently entered an incorrect distribution code. Once corrected, my problem was solved.

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