Military 1099-R has data in box 14 as state taxes deducted but Indiana stopped taxing military retire pensions. No Box 16 on my military 1099-R. How to get past Box 16a?

[kentmkaiser-gmai]

In hind-sight, I should have stopped having state tax withheld. The error is "Box 16a state distribution amount should not be less than state tax withheld.". Not sure what to enter manually for Box 16a to proceed. Thanks.

[SteamTrain]

Most 1099-R forms have box 16 empty, but many states require you enter the distribution amount from either box 1, or box 2a.  If box 1 and box 2a are the same, then there's not a problem in deciding which to use.

There should then be a follow-up page that lets you either select that the $$ are from a Military (or perhaps Govt) pension that automatically takes that $$ amount out of IN income....or perhaps the deduction occurs when you go thru the Indiana interview.

(perhaps @Rick19744  knows in which area the Indiana software works it out)

[kentmkaiser-gmai]

Thanks for the reply SteamTrain.  After thinking about it some more, I agree entering the amount from box 1 (Boxes 1 and 2a are the same amount) into box 16a is the best option.  The State portion of the software should realize Indiana doesn't tax Military pensions and hopefully issue a refund for the $120 paid this year.   -Kent 

[SteamTrain]

@kentmkaiser-gmai 

Still, check your forms before actually filing (Save to PDF on your own computer) to make sure those $$ get taken out of the Indiana income (in some subtraction of some kind).

Just getting a 1099-R form DFAS does not mean it will get recognized as "military".  Other than the name of the Payer, the 1099-R form is the same as any other pension.

Somewhere, either in a follow-up page when entering the 1099-R in the Federal section, will require you to indicate it is Military, or somewhere in the Indiana interview you will designate it as such.

[Rick19744]

A few comments:

• It's not wise to assume that the software will "know" how to handle a situation.  The software is only as good as the input.
• While Indiana does not tax it, you most likely will need to address this in the Indiana section of the software.  This deduction is taken on Schedule 2 line 7.
• You will also need to make sure that you input the Indiana withholding amount.
• I can't specifically address how to input those items, but it should be pretty straightforward once you get into the Indiana software section.  Just make sure you follow the input questions and don't just skip around.
• I would recommend you download Indiana Income Tax Information Bulletin #27 and keep this for your records as well.

[kentmkaiser-gmai]

Thank you for the additional guidance Rick.  I will definitely be careful in filling out the state form to make sure it is correct. 

[DS959]

These option responses provided are work-arounds to "fudge" the Turbo Tax Software such that it will work, plus you have to have faith ("wing-and-a-prayer") that it resolves itself when working the State section of the software later.  The real problem is the Turbo Tax software! And this problem has been generated in the last 12 months because I've never had this issue in the 24 prior years that I've been retired military and using Turbo Tax.  Even if you do enter the Box 1 or 2a amount to "fudge" the software to make it work, you are setting yourself up to lie in the next screen when it asks "does the data match what's on the 1099-R form?".  Obviously it doesn't!!  Fix the software error!!!!  You should not be advising people to "fudge" anything.