CA Pension or Annuity Adjustments questions do not specify dates for which this applies. 2025 was the first year of distribution so I don't think I qualify.

[CGiltner]

Turbo Tax questionnaire does not ask for dates, yet applies the adjustment even though I don't think I qualify.

[MonikaK1]

TurboTax provides prompts in the California return to make adjustments to California pension income if applicable. If you didn't enter an adjustment, then your state return should show the same amount of pension income as the Federal return.

You can preview your return before filing to find out how your taxes were calculated. See here for details. You can also view the Tax Summary under Tools on the left-side menu in TurboTax Online. If you are using a Desktop version, switch to Forms mode to see how TurboTax has used the information you entered to complete the forms.

In general, for taxable years beginning on or after January 1, 2025, California law conforms to Federal law as of January 1, 2025. However, there are continuing differences between California and federal law. 

Military Retirement Exclusion – For taxable years beginning on or after January 1, 2025, and before January 1, 2030, California law allows an exclusion from gross income for a qualified taxpayer that received retirement pay from the federal government for service in the uniformed services or annuity payments pursuant to a United States Department of Defense Survivor Benefit Plan during the taxable year, not to exceed $20,000. For more information, see Schedule CA (540) specific line instructions in Part I, Section A, line 5a and line 5b, see R&TC Sections 17132.9 and 17132.10, and get FTB Pub. 1032, Tax Information for Military Personnel.

[user17718241497]

Hello, I have a question about this CA Military Exclusion (Pension or Annuity deduction). When I click on the "Learn more" link, it says:

Eligibility Requirements:

- you must have received military pension benefits during the tax year
- the military pension must be entered on federal Form 1099-R with state ID "CA" (box 15) and state use code "M" (Military) (box 16)
- your federal adjusted gross income (AGI) must be below the threshold:

- $250,000 for married filing jointly or qualifying surviving spouse
- $125,000 for all other filing statuses (single, married filing separately, head of household)

Well, my husband receives military retirement on a 1099-R and we meet all the requirements above except that our 1099-R does not even have box 16 so I'm missing this: state use code "M" (Military) (box 16).

Note: Turbo Tax auto filled 20,000 in the form, I presume because he earned over 20K in retirement. Our gross is less than the married/filing joint AGI.

I'm not sure if we don't qualify at all (due to something we aren't aware of) or if the Turbo Tax "learn more" link is incorrect on box 16. Can someone please confirm we need box 16 and if so, what that actually means in this case?

Thanks!

[AmyC]

When you entered the 1099-R, you must have marked that it was military retirement which makes the program do the same thing as the M in box 16. Either one can tell the program to create the $20,000 exclusion you deserve. You should see it as a subtraction on CA 540, section A line 5. Great job entering the form and doing the research.

[user17718241497]

Great, thank you! I was afraid I might take a credit not meant for us and then would end up getting audited and owing money. Appreciate the swift reply!