Apparently still bug in software where defined benefit pension are showing as taxable income. This is happening for Alabama tax return and also in tax returns last year.

jackinemhouston,

 

I've alerted the powers that be to your issue and asked them to dig into it.  I'll try to keep on top of it.  (No, I am not an employee of Intuit, just a long time forum participant.)

There is not a bug, you are required to enter that it is nontaxable. The program has a place in the state section for you to enter that it is exempt.

 

Please follow these steps:

1. Return to the state of AL and edit/ update/ review
2. Continue through until you see About Your Retirement Distributions
3. The screen shows all distributions.
4. Click EDIT next to the exempt pay
5. Special Handling of This Distribution screen
6. Is this income not taxed by AL? Select YES
7. Summary screen shows zero for AL taxable
8. Edit each income which is exempt.

 

The actual list of qualified plans is over 25 pages long, A consolidated version is Income Exempt from Alabama Income Taxation.

 

 

I saw these screens for the first time this year after going through my St of AL taxes 3 times.  I was just wondering when this was put in the software?  Has it been there all the time and I just missed it?  I lost thousands of dollar because I did not see this screen in previous years.  Just wondering.