Arkansas state tax return not computing the $ 6,000 exemption from pension income on Line 18A

[Jean182]

The Arkansas state tax return is not subtracting the $ 6,000 exemption that we receive from pension or IRA income. This should be on Line 18A of the Arkansas return. We have had this for many years and it has always worked before. It has nothing to do with the new senior deduction on the federal return. I have spent hours on phone with support and their latest advice was for me to just get the forms and do it myself manually. This is not an acceptable answer, and I have reported this to the state of Arkansas. You need to fix your software. What is the status of this problem? Thanks so much.

[sssnake]

I feel your pain. I have been getting the Arkansas 6000 dollar pension deduction for over a decade. This year it forces me to do that 65 Special thing. So I uncheck and manually over ride and correct the forms to give me the 6000. I get all the way to efile and paid $25 for the state efile and then they tell they need to check 1 more thing and bring me right back to those over rides and will not let me efile until I change them which would make them incorrect.  Now I ran Smart check at least 10 times and they wait until I pay my 25 dollars to tell me this. If I would not have paid already, I would just print the from for Arkansas and mail them in. Please let me know if you find a solution. And I'll do the same. I'm going to post a new question as well. 

[JamesG1]

The Arkansas Department of Finance and Administration website here discusses overriding the value in box 1 and/or box 2a of the IRS form 1099-R.  

However, taking this action would cause issues with the IRS and your Federal 1040 income tax return and may invalidate the TurboTax guarantee.

@Jean182 

[sssnake]

Yes, I've read all of that already.  Nothing new there. Nothing has changed in Arkansas in reference to this $6000 deduction which is why I don't understand it. But thanks for the effort. I have already e-filed my Fed return and it's been accepted. So I just printed out the Arkansas returns and if there is no update by February 11th that allows the e-filing of my Arkansas returns I am just sending them in by US Mail.  

[Jean182]

So you are paying for an Arkansas tax return that is incorrect and that you didn't get to e-file? If not, then how did you print out the forms?

[sssnake]

 I had already paid the $25 to file the AR taxes when TT stopped and said we needed to check something before filing and it just went back in a circle to the Overrides I had made and would never let me e-file without changing those overrides. So I got tired of that and just e-filed the Fed separately and it's been accepted. Now my AR return is 100 percent correct with MY OVERRIDES. No doubt about it. So I printed it and will mail it in because it doesn't look like TT will get this update anytime soon.  So in answer to your questions yes I paid for the e-file that I never got. And yes it was no problem printing out the State returns after I made the corrections. Hope this helps. 

[user17704082538]

What is the status of this?  Also, I see in my return the 65 Special box is checked on 18b.   My spouse has a small pension (less than 2k) but it has $0 in the income column in 18b and the 65 Special Box is checked.  Which looks like no income was reported even if the 65 Special box is checked.  I would expect the 2K to be listed under the Spouse's income (column b) since the 65 Special box is checked.  It kinda looks like she got the extra credit and her pension income was also reduced.  So for AR state returns the 6K pension income for Primary and Spouse is messed up.  Again it looks like the credit was checked and the pension was reduced (by 2K in my case).   

[AmyC]

This is a known issue INV-1467-3035-8978-5649-152. We are working to resolve your issue.  We’re actively working on making your tax filing experience easier.

[sssnake]

You probably know this but just to make sure you do, you CANNOT take both the 65 Special exemption and the $6000 Pension deduction. And you are correct TT wants to give you both or just the 65 Special. I just manually made the corrections to get rid of the 65 Special and give myself the $6000 pension deduction. I then printed out my AR return to mail on the 12th if there is not an update by the 11th. I am just out 25 bucks for the State e-file. 

Anyway, those are your choices, just wait until or if it's updated or print and mail. 

Hope this helps. 

[sssnake]

UPDATE: Saturday 02/07/2025: TurboTax HAS BEEN UPDATED for Arkansas returns. Just filed mine electronically. 

One thing, it will take you back to those entries and you will have to right click on each one and UNDO the Override. But don't worry it leaves the correct entries that I entered. 

I was able to e-file and I'm done. Hope this helps others. Go check now this Saturday morning.

[Jean182]

I am using TurboTax Online rather than desktop, so the override issue does not apply to me. I tried again on Saturday and was able to e-file, but today I just received word that my return was rejected. After many tries, I got the following message in the chatbot Help:

"TurboTax is aware of an issue causing Arkansas state tax returns to be rejected related to the pension exclusion and the Over 65 credit for the 2025 tax year. This issue affects calculations for taxpayers who qualify for these benefits, potentially leading to incorrect return rejections. TurboTax is actively working to resolve this problem in their software to ensure correct processing and acceptance of affected Arkansas returns. For now, affected users may experience delays and should carefully review their entries for eligibility and completeness. Updates and progress on this fix will typically be communicated through TurboTax announcements and updates within the software."

[Jean182]

The problems that we have had this year, especially with our Arkansas returns, are inexcusable. Now our returns have been rejected due to TurboTax sloppiness with the pension exclusion/over 65 credit choice and we don't know how to fix them or what to do. This has worked for years, so I don't know how you messed it up this year. Clearly your programmers didn't even bother to look at or start with how it worked last year. Customer Service is awful, if you can even get anyone. Callbacks never happen. Two separate customer service representatives have told me I would be better off just filing a manual return myself. I have used TurboTax Online since 2002, but I doubt I will ever use it again. Loyal customers do not deserve to be treated this way.

[sssnake]

Yep, my AR returns were just rejected. Sorry, guess I spoke too soon. What is weird is when I go back in to see the message of what is wrong it is BLANK. And where you see Description of Error and What Needs to be Done, they are also blank. I ran error check again and TT says no errors. It takes me all the way to refile again and I can't bring myself to do it. I think I will just mail mine in. This will ultimately make me change tax software after more than 20 years of TT.  It would be different if there was some new change but there is not so really no excuse for all this.  Good luck. 

[Jean182]

The message I got was:

"Error code: TY25_AR_Age_65, details are not available. Reject Code TY25_AR_Age_65"

I selected "Fix It" and refiled, but I feel sure it will be rejected again. I guess the "Fix It" button doesn't work any better than anything else provided to us Arkansans this year.  If it is rejected again, I may have to resort to a manual return also. I will be reporting this to the State of Arkansas. I believe that TurboTax should give us all refunds. Thanks so much to all customers who communicated back with me on this. It helps to have that validation, especially when we are getting no help at all from TurboTax.

[sssnake]

At least you had some codes. I have nothing to correct or click on. If you don't mind, could you post back whenever the state hopefully accepts yours or if they do not? Thanks