Since your LIRR pension is reported on a W-2, and not a 1099-R it is not receiving the pension exclusion benefit on the New York State return.
As a workaround, report your pension distribution on the 1099-R entry screen, instead of a W-2. If this is a normal distribution, select code 7 in box 7 of the 1099-R
To enter the information from your 1099-R in TurboTax, please follow these steps:
- Click on Federal Taxes > Wages & Income [In TT Home & Biz: Personal > Personal Income].
- Scroll down to the Retirement Plans and Social Security section and click on the Start/Revisit box next to IRA, 4701(k), Pension Plan Withdrawals (1099-R).
- On the Your 1099-R screen, click Yes and then Continue.
- Click on the I'll type it in myself box.
- After entering the information on the 1099-R screen, you will be brought to the screen, Where is this Distribution From? Mark the button for Certain Public Authorities and enter the NY Distribution Amount. Click Continue.
When you go into your New York return, the pension from LIRR will be excluded from NY taxable income.
[Edited | 4/15/2020 | 8:00am PDT]
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