I believe I found a serious error in how Turbotax calculates pension amounts exempt from state tax. I have a government pension for which it correctly calculates the exempted (non-taxable) amount in Part 1 of Schedule P. Part 2 of Schedule P is for other types of pensions (non-government) that are subject to the $31100 exemption ceiling. I do not have one of these pensions, so the amount entered in Part 2 should be 0. But instead, Turbotax has entered the amount of my government pension that is NOT exempt. In Part 3, this amount, that should be taxed, is added back to the exempted amount, and the total, that is, my entire pension, is used as a reduction of my federal AGI in Schedule M. This will result in a substantial underpayment of the Kentucky tax that I owe.
