California FTB now exempts the first $20,000 of military retirement. It seems Turbo Tax software does not apply military retiree the $20,000 tax exclusion.

Forum|Forum|4 months ago
January 23, 2026
2 replies
2 views

Have been on the phone with Turbo Tax for over an hour trying to remedy this with negative results

TurboTax Online

DaveF1006

Level 15

You will enter this into the state interview section. Once you prepare your California State return, you will land on a screen that says Any Pension or Annuity Adjustments. Here you will enter your military retirement pay as a subtraction.

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jrkirwan

Level 2

Also at issue is that there are AGI limits on taking this exclusion. FTB publications are worthless on the topic and refer you to California Income and Tax Code Section 17132.9 and 17132.10. I have quoted section17132.9 below for your reference (but recommend you read them for yourself):

(1) “Qualified taxpayer” means a taxpayer that satisfies either of the following:

(A) In the case of a surviving spouse or spouses filing a joint return, adjusted gross income, as required to be shown on the federal tax return for the same taxable year, does not exceed two hundred fifty thousand dollars ($250,000).

(B) In the case of any other individual, adjusted gross income, as required to be shown on the federal tax return for the same taxable year, does not exceed one hundred twenty-five thousand dollars ($125,000).

ccr69

Level 2

Also at issue is the 1099-R from myPay does not have a Block 16 coded with "M" in fact there is no Block 16. I have posed this question to DFAS and myPay.