Siretman
Returning Member

457 non-qual plan distribution is handled differently in federal and state return

My income filings included a W2 for a distribution from the above named plan. Turbotax  should have handled it as a regular wage on line 1a. Turbotax did not put it in the W2 line 1a on the 1040 form but instead it treated it as extra income line in Schedule 1 line 8t and ultimately line 8 on the 1040 form. 

In the California return, the distribution which is shown in the federal W2 form on line 16 State wages, is shown form 540 line 12 and treated like a regular wage item.

 

The difference in handling has resulted in my State return being rejected and Turbotax is working on the fix which unfortunately will not be ready until March.