1099-R box 12 term EXEMPT. Amount exempt from New York taxes. TurboTax Deluxe lists this amount on NYS form IT-201 (line 10) as taxable income. How can this be corrected?

[maxx5776]

Form 1099-R shows term EXEMPT in box 12. Amount on this form is dispersal of New York State Retirement pension and is exempt from New York State income tax. Software lists full amount on New York State form IT-201 (line 10) as taxable state income. How can this be corrected?

[IsabellaG]

If you entered this 1099-R in the federal section and checked that the distribution was from the State Retirement System (see the screenshot) you will see the pension included on line 10 of Form IT-201, but you will also see a NY Subtraction for this retirement on Line 26 of the form. See the screenshot for how this appears. 

[gofigure123]

Hello:

My problem is that the program is not populating line 26 on form IT-201, New York subtractions as you mentioned.

I must type it in myself because I don't see the amount subtracted anywhere else! 

Line 10 IT-201 contains the total of both our pensions but only NY is not taxed.

The 1099R associated with my NY State pension is entered as instructed! So the question is why isn't the program filling in line 26 in IT-201?

Please advise.

LOU

[RogerD1]

It's possible that some information you entered in TurboTax regarding the pension may need to be changed.

1. If you go to the Wages & Income section (TurboTax online) or Personal tab, then Personal Income (TurboTax desktop), locate under Retirement the 1099-R you entered for you NYS pension.
2. Edit the 1099-R, and click Continue on each screen until you get to one called "Where is your distribution from?"
3. Check the circle for the correct category of NYS pension income, which will likely be the first category (the other categories will deny a deduction for the pension exclusion).
4. On the next screen, be sure that Qualified plan is checked.

Taking these steps should allow the NYS exclusion of pension income on your return.

[gofigure123]

OK

Here is what I found:

On the pension and annuities worksheet there is a box that must be checked "qualifies for gov't exclusion".

Once I checked this box the program automatically populated line 26 with the correct NYS pension amount and also correcting line 29 "pension exclusion credit" So now I have the full exclusion of my NYS pension and my allowed exclusion discount of my non govt. annuity. 

Be aware that there is definitely A problem that exist with turbotax. The program returned the absolute wrong calculations and reported back with no errors when completing the NY state return review even when it reported no tax owed!

Thank you much for your reply.  All comments appreciated.

Lou

[ecobalt]

This definitely should be fixed in Turbotax. I had a similar but different problem.  I have several totally exempt retirement accounts from TIAA as a SUNY retiree that should be reported on NYS 201 line 26 and others that are only exempt for the NYS 20k cap (NYS 201 line 29). All were reported on only one 1099R. On the back of the 1099, each account was broken out, including withholding. If I entered it as one 1099R it would all flow to line 29. So I broke it up into two...one for the income that should be on line 26 and one for the rest for line 29.  After a lot of trial and error, I figured out that if I went to Forms and entered G in box 12 of the 1099R form it would flow to line 26 and if I entered 0 (zero) it would flow to line 29. The TurboTax consultant was not able to help me because he could not see my forms for some reason. I think that the problem is that the Easy Step instructions are not clear about which source you should choose to identify what is fully excluded or not. By trying different selections in Easy Step and checking the resulting code in the Forms view, I was able to figure out the codes. Then I manually entered the right ones on each 1099 Form. TurboTax - please fix this!! 

[RogerD1]

When you entered your 1099-R in TurboTax, you should have seen a screen "Where is your distribution from?" and there are four possible selections.  if you select the top selection for Retirement distributions from US Government, NY state and city education, etc., this will make this type of pension non-taxable on the New York State tax return.  The subtraction of that pension will be on line 26 of IT-201.  The bottom selection on that screen is None of the above and that will give a subtraction of up to $20,000 of pension or annuity income.  The subtraction of this will be on line 29 of IT-201.

[gofigure123]

Hello and thanks for your reply.

To make A long story short in order for Turbo Tax to correctly interpret A 1099R that is tax exempt you must check the box on the pensions/annuities/IRA worksheet. I was assuming that Turbo Tax automatically did this when you indicated that you are a NYS resident and I did not have to enter the G code?

Also be careful when turbo tax tells you no problems found on final review because it's not always correct. I did A roth roll over and was surprised to see (after submitting) I was charged A penalty for underpayment when their was none. The program never put up A flag about the penalty. It was only a mater of checking A box on one of the  forms .

Lou

[ecobalt]

The problem in Easy Step is that there is more than one possible choice on the screen entitled ":Where is your distribution from?" The first choice includes "Certain public authorities".  This could mean SUNY. The second says "NY State and City Education" which could also mean SUNY. But to make it more confusing it also adds "optional retirement program."  As I understand it, for SUNY retirees, only the ORP accounts are eligible for the full exclusion. So, it is not clear which of the choices to pick...hence the need for trial and error. What I wrote above is the result of my trial and error. I discovered another problem. As I noted above, I have multiple accounts from the same source (TIAA) but only one 1099R, which lists the numbers for the boxes on each individual account on the back. I divided them up into two 1099Rs - completely exempt and only exempt up to 20k. But in Easy Step there is a question as to whether they are 403b accounts of some other type of plan. This presents a problem since the two different groups have both 403b and 401k plans. I don't know what the implications of answering are one way or the other. So, I am now dividing the 1099R entries into individual accounts. This is tedious because I have more than 10 accounts plus other sources of retirement pay!  It would be good if TIAA allowed a choice to automatically fill in the source, address, and ID number of the payer and the taxpayer. But I am hoping that next year they all transfer over. 

[gofigure123]

Yes you are correct. I remember how confused I was when I saw that. I also did trial and error that’s when I noticed the question that was on the form “keep for your records “ full tax exempt. Upon checking the box it correctly came up with the right amount and made all the correct entries. 

thanks 

Lou