PERS retirement funds can be subject to federal tax, but they are not taxed by the state of Mississippi for a resident that lived in the state of Mississippi the entire tax year. (Other states may tax this).
Turbotax has been getting this wrong in situations. In the 2021 version there is a small checkbox in the MS 1099-R section labeled "I qualify to exempt this income from Mississippi tax". I found that has to be checked to properly not tax state employee retirement income for a retiree who lived in state.
I really dislike that Turbotax is relying on that checkbox to do that. Honestly, this is why we use TurboTax, to not have to dig down into the nitty gritty of all of this, and have the software know to do it for us.
It makes me wonder how many other places there was a small checkbox that I was unaware needed to be checked in some specific situation to correctly calculate my taxes?
This needs to be changed to user questioning in the software as income is entered, as opposed to a small checkbox. Other tax softwares are getting this correct from the start, without having to jump through these hard to notice hoops.
There is a good resources by PERS explaining your 1099-R that explains the MS tax situation on it.
https://www.pers.ms.gov/Content/1099/Understanding_your_IRS_Form_1099R.pdf
