Retirement tax questions

I assume that the annuity from the charity was reported on a 1099-R. Pensions, annuities, and IRA distributions are all reported on the 1099-R. However, there are different types of entities that make distributions, so in the interview after you enter the data for the 1099-R, you will be asked a number of additional questions to clarify what type of instrument this 1099-R came from. For example, we need to ask if this 1099-R comes from a Qualified Plan or a Non-qualified Plan.

I am guessing that you answered "Qualified plan" for the 1099-R(s) for the annuities from the charities. However, as you can see, "private or purchased commercial annuities" are non-qualified plans. TurboTax has no way to differentiate between the types of 1099-Rs that there may be, so we have to ask and we depend on your answers.

As you have seen, the Maryland pension exclusion is for 

"You included on your federal return taxable income received as a pension, annuity or endowment from an “employee retirement system” qualified under Sections 401(a), 403 or 457(b) of the Internal Revenue Code. [A traditional IRA, a Roth IRA, a simplified employee plan (SEP), a Keogh plan, an ineligible deferred compensation plan or foreign retirement income does not qualify.]" see Instruction 13 of the Resident booklet.

By checking "Qualified Plan" Turbotax assumed that this distribution came from a retirement plan, so mistakenly thought the distribution was eligible for the exclusion.

Please go back and look at your paperwork and see if this is what happened. If not, come back and tell us.

If you ever see questions in TurboTax (like Qualified versus Non-qualified plans) that you don't understand, please move over to the Forum and ask a question, or look up to the upper right and click on Live Tax Advice (it may ask you to upgrade).