If you use Form N-15 as part-time resident, does the same rule apply?
See the instructions below on how to enter your Hawaii pension so it is not taxable.
TurboTax Hawaii uses the following pension code (Form N-11 filers only): G - Government, military, other qualified retirement (if employee did not contribute).
If your distribution qualifies, you can deduct it from your Hawaii taxable income. To qualify, the distribution must be one of the following:
To get the Hawaii state pension deduction, you will first have to enter the necessary information in your Federal Income tax return and then in the Hawaii state income tax return.
Here are the steps to enter your exempt Hawaii state employee pension :
On the Hawaii state return portion: Review the Pension Deduction Summary for the deduction.
How do you correct the social security as not taxable for hawaii?
There is no pension deduction summary in the hawaii state tax section.
Since Social Security is entered on a unique form on the federal return, states that do not tax Social Security don't need to be told what it is - the SS is automatically removed from state income.
As for your state pension, after you enter the 1099-R on the federal return, there will be a screen that ask "Where is your distribution from?" Check off that this is a "Government, military or other qualified pension where employees don’t contribute".
This is the only way that TurboTax can know how to handle your state pension.