TurboTax correctly calculates tax breaks on the New York state return.
The $20,000 New York pension exclusion DOES NOT include pensions from New York state (NYS), local governments and/or the federal government.
Lines 26 and 29 of Form IT-201 refer to two different types of pensions.
Line 26 is a subtraction for nontaxable government pensions. A pension received from NYS and local governments or the federal government are subtracted in arriving at a NYS adjusted gross income figure, so they are not considered in the calculation for the $20,000 exclusion for pension income that is taxable by NYS.
Line 29 is the exclusion of up to $20,000 for taxable pensions.
See Common questions and answers about pension subtraction adjustments
