Should turbotax change entry from Retired or retainer pay of the uniformed services of the US to Federal government pension?

[randcbean]

On the form "Where is This Distribution From" checked "Retired or retainer pay of the uniformed services of the US" and clicked continue, however when I go back the entry is changed to "Federal government pension". 

[SteamTrain · Accepted solution]

(Note: I changed your .docx to a picture....not everyone has Word)

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Yes...several states do that.  Not a particular problem, other than confusing people to no end.

The Uniformedservices/Military pension, is  a Federal pension.  The actual AZ tax return doesn't distinguish between the two.

The extra selection is there because of all the questions people have had in the past, that ask whether their Military/uniformed service pension is Federal or not...so they (TTX) put in the extra selection, even though it does the same thing in the AZ return.  

Then it confuses others like you.  Damned if they do..damned if they don't.

Yes, we've complained before that it sure would be nice if they were able to "keep" the button selected so it doesn't confuse people. but no success so far

Some of the other selections may revert to other selections too, but I'm not familiar with all of the AZ pension options.

[randcbean]

Appreciate the detailed answer, eliminates the confusion that I was doing something wrong.   Thanks again

[bryan3936]

My mom gets half of my dad's uniformed services pay as part of their divorce decree. For the first time doing her taxes, I checked the "retired or retainer pay of the uniformed services of the US..." box.  In the end, she was getting a small refund. Then I rethought that check box. I deleted the return for AZ and redid it, NOT checking that box. This time, she owed hundreds of dollars. If it doesn't matter, why did her return change so drastically? (an $800+ swing from getting money back to owing)

[DMarkM1]

AZ excludes military retirement pay from AZ taxable income.  If the box is checked identifying the income as military retirement pay then it is not taxed.  

Further, according to the Arizona Revised Statutes as extracted below, AZ does not indicate the recipient has to be retired military only that the pay received is military retirement pay.    

Benefits, annuities and pensions received as retired or retainer pay of the uniformed services of the United States in amounts as follows:

(a) For taxable years through December 31, 2018, an amount totaling not more than $2,500.

(b) For taxable years beginning from and after December 31, 2018 through December 31, 2020, an amount totaling not more than $3,500.

(c) For taxable years beginning from and after December 31, 2020, the full amount received.