Military retirement pay, exempt from Hawaii state tax or federal tax

[vielmas_5]

If it is exempt, where  and how do I file?

[BarbL · Accepted solution]

Your military retirement pay reported on the 1099-R is exempt from Hawaii tax, but is taxable at the federal level.  To receive the Hawaii exemption, as you are entering your 1099-R in the Federal section, look for a page titled "Where is this distribution from?"  Be sure you select 'Government of military pension'.  (See first screenshot below.)  When you get to the state section, you will see a pension deduction for your military pay.  (See second screenshot.)

If you are receiving disability pay from the VA, the disability pay is not taxable on either your federal or state return.  You will receive no tax document, and it is not reportable.

[Cocolani]

I have the same exact problem.  I was entering my 1099 R, but I can't find the page that says "Where is it from?"

[DMarkM1]

The "Where is this Distribution From?" page appears according to the entries in the "My Info" section. 

You should be sure that you have indicated that you are "Former Military" and "Retired" in the "My Info" section. 

If the state you have entered as your residence in "My Info" has special tax breaks for certain "retired pay" then the "Where Does This Distribution Come From?" page will appear as a follow on question when entering 1099-R information.

Those tax breaks in turn will show up on your state returns.  

[Cocolani]

I checked and reviewed the accuracy of my info in the "Forms" section on the upper right hand corner of Turbo Tax and double checked the dates of my residencies in 2 states.

[1johnrl]

I'm having the same problem.  I corrected my info to include that I am former U.S. Armed Forces and then I went back to the income>IRA, 401(k), and pension plan withdrawals and went to edit my 1099-R from the Defense Finance and Accounting Service which issues my monthly retirement pay.  I went through all the pages and did not see the page asking me "Where is this distribution from?".  This is frustrating and Hawaii tax section is taxing my non-taxable retirement payment when it should not.  For Military there should be a button or icon to go directly to that form if the program doesn't do by itself (just a suggestion).  Can someone please let me know how I can resolve this issue.  Thank you.

[IsabellaG]

I get this question in the federal section of the return, two screens after I enter my 1099-R from DFAS.  In TurboTax Online, it comes right after "Is the IRA/Simple Box checked?" I indicated that I was a full-time resident of Hawaii in my personal information.

In TurboTax Desktop, the screen looks a little bit different, and comes on the third screen after entering my 1099-R, after "Were you employed as a public safety officer?"
 

Then, as you go through the Hawaii state return, you will reach a screen Exclusion Amount where you can enter the amount of your pension that is nontaxable. 

This will report your retirement income as tax-exempt in Hawaii.