California Military Retired exclusion. The form shows $20,000 but I earned less however it doesn't allow me to change it. What can I do?

[DaveF1006]

It depends. TurboTax pulls this number from your Federal 1099-R. If it’s grayed out or unchangeable in the State section, the "connection" between the Federal entry and the State adjustment is broken.

Fix the Federal 1099-R (The most likely culprit) The software only triggers the correct exclusion if the 1099-R is coded exactly right.

1. Go back to the Federal "Wages & Income" section. 
2. Edit your Military Retirement 1099-R.
3. Ensure Box 15 (State) says CA.
4. Crucially, look for a follow-up question after the main 1099-R screen that asks "Where did this money come from?" or "What type of plan is this?" * You must select "US Military Retirement" or "Qualified Plan" (the wording varies by version). 
5. Ensure the Employer Identification Number (EIN) is recognized as the DFAS or military pay center.

 Once the Federal side is fixed, go to the California State interview:

1. Look for the section titled "Adjustments to Federal Income" or "Pensions and Annuities." 
2. You should see a screen specifically for the Military Retirement Exclusion. 
3. If it still shows $20,000 and is uneditable, delete the 1099-R entirely from the Federal section and re-enter it manually (do not import it). This often clears "ghost data" that forces the $20,000 cap.

[MaryY1]

How do you not import from your Fed to your state?

[JamesG1]

In TurboTax Online, in the California state income tax return, the California Military Pension Exclusion is reported at the screen Any Pension or Annuity Adjustments?.

You may not be able to not import from your Federal information to California state, but adjustments are available. 

The screen says:  "If your pension or annuity distribution has a California taxable amount that is less than your federal taxable amount, enter the difference as a subtraction."

And, as @DaveF1006 states above, you may be able to remove the IRS form 1099-R and re-enter the income.

@MaryY1 

[MaryY1]

I will try re-entering the 1099-R on my state I have already gone back to the Federal several times.  If I put the difference in as a subtraction in the Military Retirement Exclusion box it then shows as a negative amount so that didn't work.  I will try re-entering again.  It was also suggested that I file with the wrong amount and then file an amended return.  I'd rather not do that unless I have to so I will try re-entering the 1099 on my state form.  

Thanks your help is appreciated. 

[JamesG1]

I am unable to duplicate your experience in a California income tax return.  I am able to report the correct amount of the Military Pension which is less than the $20,000 maximum.   

If you report the difference as a Subtraction of the Military Pension Exclusion, do you find that the correct Military Pension Exclusion amount is reported on California Schedule A and the California 540 Resident Income Tax Return?

For instance, if your Military pension is $15,000, does the screen Any Pension or Annuity Adjustments? report $20,000 less $5,000 = $15,000?

@MaryY1 

[MaryY1]

I did that and then it shows a -15,000 as the exclusion.  In other words it doesn't apply the exclusion as a credit on the form.  Or should it be a minus.  When it does that it increases the amount I have to pay the state so I feel it's incorrect.   Please help. 

[JamesG1]

The California Military Retired Exclusion may be found in TurboTax Online, in the California state income tax return, at the screen Any Pension or Annuity Adjustments.

You are correct.  A minus entry in the column Subtraction reduces the Exclusion.  The amount you pay the state likely will increase.

@MaryY1