spud2
Returning Member

Military Pension should not be taxed

My military pay should not be taxed on my Ohio State form but Turbo Tax added it in my income.  How can I fix this?  This should not happen and needs to be corrected in your software.

BillM223
Expert Alumni

State tax filing

Note that not all military income is nontaxable in Ohio - please see this Ohio webpage.

 

Note that TurboTax cannot exclude your military pay if it doesn't know what it is, so you have to tell TurboTax what is military pay.

 

There are generally three things that you must do, all on the federal return.

 

If you are an Ohio resident (i.e., home of record), then be sure to enter this in the Personal Info or My Info section, regardless of where you are currently stationed.

 

In the same section, indicate that you are a member of the US military. This will cause several additional screens to appear, asking your duty status, your rank, your combat zone (if any), and other things.

 

Then, when you enter your W-2 from DFAS, on the screen after this ("Do any of these uncommon situations apply to this W-2?"), be sure to check off that this is active duty pay (if it is).

 

By this point, Ohio probably has enough information to handle your military pay. However, if there is anything else that Ohio needs to know, it will normally ask it the first thing in the Ohio interview.

 

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spud2
Returning Member

State tax filing

Your reply did not give me an answer to my problem.
I am retired military.  Retired pay is not taxed in Ohio.  I answered that this was a non-qualified plan.  This is the only question the software asked me. 
 
It included my retirement pay in the Ohio State Tax form and it should not have been included.
 
I ended up filing my return through the I-File for the state of Ohio (which I had to re-enter all my tax information again).  It would have been easier to file with Turbotax but I couldn't figure out how to tell it to exclude this pay.
 
I will try again next year 🙁
 
Any help for next year would be greatly appreciated.
 
Hal_Al
Level 15

State tax filing

The Ohio software does not automatically exclude (deduct) the military pension.  You have to re-enter it in the Ohio program. 

On the screen "Here's the  income that Ohio handles differently", scroll down to:

-Retirement

   -Military and civil service retirement

 

To get that prompt, you must have entered a 1099-R in the federal program

 

spud2
Returning Member

State tax filing

I did not get that screen when I went to determine my Ohio tax.  I did enter this as a 1099-R.  The program imported all my federal information, went right into the analysis and checked for errors.  It did not ask me any questions or let me edit the return.  I've tried multiple times to try to find the detail on the Ohio return and could not until I was able to print it.