To stop your retirement income from being counted as part of gross income and being taxed by the state, you'll need to first add the income to your Federal Income tax return and then in the State income tax return.
Here are the steps to enter your exempt State employee retirement income:
On the Federal Income Tax portion:
- In the search or find box, type in 1099-R
- Click on Jump to 1099-R
- Scroll down to Retirement Plans and Social Security
- At IRA,401(k), Pension Plan Withdrawals (1099-R), click Start (or Update)
- Enter your 1099-R or if you have entered it, click on Edit then Continue
- Answer the next questions until you get to the Where Is This Distribution From? screen
- Select the source State Employees and enter the information requested:
- Click on Continue
- Click on From a Qualified Plan
- Continue answering the questions
On the State return portion:
- In the Mississippi interview, look for a screen called Enter Any Other Income and Losses
- Enter the amount of the pension distribution as a negative number
- Enter the description of "MS pension adjustment"
