I think TurboTax is screwed up.
As DavidS127 says, the Michigan state return starts with Federal AGI - and the Federal AGI as prepared by TurboTax does NOT include any portion of qualified withdrawals, so why does TurboTax then go and put the entire qualified withdrawal as a subtraction to income in the preparation of the Michigan state return?
For my last two filings, 2019 & 2020, I got a letter from the Michigan Treasury stating that they had to correct my return, removing the MESP qualified withdrawal from the subtractions that TurboTax is preparing/entering. And I can see the same thing happening in TurboTax as I prepare my 2021 return. And for all 2019 - 2021 returns the TurboTax error check has not caught this issue.
I have gone through all the questions multiple times to ensure I am not answering anything incorrectly, or entering any incorrect data, I am going to have to go into the Forms mode and manually correct the MI Schedule 1 to remove the MESP qualified withdrawal from the Schedule 1 subtractions that TurboTax is preparing.
If anyone can explain to me where I might be making a mistake in my entries, and that TurboTax is actually acting properly, please let me know - otherwise, I am proceeding with the manual adjustment in Forms mode.
Thanks!
