During review of MA State Form 1. "Tax-Exempt Pension should not be entered directly on Form 1" not sure how to fix. Pension Type is G (tax exempt)

[taxacct5]

Tax Exempt dollar amount listed is correct.

[RaifH]

After entering the information from your 1099-R for this pension, TurboTax should ask Where is your distribution from? Did you select a Qualified government retirement distribution?

If the pension is exempt from Massachusetts state income tax, this is where it should be indicated with no adjustment needed in the state section of your return. If this is how you entered it and it is still giving this error, you may want to try deleting the 1099-R and re-entering it. 

[Ron_M]

The response does not address the fact the "G" is a rollover condition. It is not a pension payout/distribution.  It just happens that rollover use the same 1099-R form.   I have the same issue. I think it is a software bug with TurboTax, this didn't happen in the past.   And I am especially disturbed that the error showed up only when I was doing my electronic filing (after I paid for the State e-file).  

[BillM223]

Ron_M, yes G means rollover when it is the distribution code on a 1099-R.

However, on the Massachusetts return on Form 1, G means a tax-exempt pension distributions (because it comes from the state or other exempt organization).

Raif's response is correct if the original poster had something like a 1099-R from the MA Teacher's Pension Fund, and the OP forgot to make the data entry on the 1099-R interview as Raif described it.

Or do you have another reason to the that G as a rollover is germane here?

@Ron_M

[Ron_M]

Hi @BillM223 

My Rollover is a 401k Rollover to a Traditional IRA account; in this case I had two Rollovers / two 1099-Rs.   These Rollovers are non-taxable distributions and is clearly and correctly shown on the 1099-R forms (which I checked the entry into Turbo Tax multiple times).    This is not a Pension Fund distribution scenario.    [It appears that Pension Distributions and 401k Rollovers both use the 1099-R Form.]

This issue presents itself when I "submit" for electronic filing.  The software does another check and comes up with a page with the Header "Check This Entry" 

The message  states:

Form 1: Tax-Exempt Pension should not be entered directly on Form 1 for State Electronic Filing.  You should enter the information on the Federal Return, Form 1099-R and/or use the Pensions and Annuities Smart Worksheet to make any tax-exempt adjustments. 

Then there is a line that reads:

Tax-Exempt Pension  [with a box that has the number "0"]

Below it is a scrolling window showing what appears to be a worksheet for Massachusetts Resident Income Tax Return 

with the section : Pensions and Annuities Smart Worksheet 

It list my two Payer's Names in the column for "** I have confirmed that the pension amount is correct" is checked off .  The column for Pension Amount reflects "0" for both lines. 

Below that box is a section for Pensions and Annuities [#4 is referenced on left].

For the line for "Tax-exempt portion of pensions and annuities - the box has a blue background and the number "0" is in red.  To the left of the blue box is a graphic "+"  - when selected it pops up another overlay box for supporting details in which there are empty lines for description and amount.  I tried entering "Rollover" and the amount of "0.00" . But no matter what is entered I still am unable to submit.  I will hit continue, but the software does another check and brings me back to this Check This Entry page again and again and again.  

After several tries, I also tried entering "G" for Tax-Exempt in the Type column (it was the only logical entry from the drop down option) , but that didn't solve the issue either. 

It would be appreciated if you could advise as what I need to do to get this entered correctly for the state return.  I don't understand why, from a software perspective,  Turbo Tax hasn't programmed in what needs to be done automatically.  This is a lot of troubleshooting and manual workaround effort for a paid product.   I have done rollovers in past years and never came across this problem.  

[BillM223]

Ron_M - I answered the way I did because it sounded like the Original Poster was worried about a MA pension being taxable (I have seen some other questions on that issue).

OK, now that you have explained what you're up to, let's see what we can do.

" [It appears that Pension Distributions and 401k Rollovers both use the 1099-R Form.]"

Yes, they do, although a number of plan administrators doing a trustee-to-trustee rollover such as your 401(k) to IRA won't even bother to issue a 1099-R, because they figure there's no tax consequence.

"Form 1: Tax-Exempt Pension should not be entered directly on Form 1 for State Electronic Filing.  You should enter the information on the Federal Return, Form 1099-R and/or use the Pensions and Annuities Smart Worksheet to make any tax-exempt adjustments. "

This is all quite true. I think the problem here is that so far as you know, you didn't enter anything directly on MA Form 1 (did you?).

"Then there is a line that reads:

Tax-Exempt Pension  [with a box that has the number "0"]"

Is this in the Final Review or in the state review?

"and the number "0" is in red."

The red indicates that you have made an override here. 

I don't know that you did; it could have been a slip of the fingers or random cosmic radiation.

OK, you have tried to delete the entry in this box, right? No, the problem is that, as you realize, that you should not have anything talking about non-taxable pensions.

So let's try this: go to your federal interview for the 1099-Rs, delete these two (or one if only one 1099-R is the problem), then go back to the MA interview and run through it (giving TurboTax a chance to flush it out), then go back and re-enter this 1099-R, then go back to the MA interview and run through it, and see if that gets rid of the "number in red".

What's stopping you from filing is an override on the MA form 1, so we need to clear that.

@Ron_M

[Ron_M]

Hi @BillM223 

Before I go back and delete the 1099-Rs from the Federal Return, is there any way to manually update the State Form 1? or delete the 1o99 R from the State all return?  I tried to navigate through but can't locate Form 1on Turbo Tax.  

As I have already filed my Federal return, I am not comfortable deleting components of it just to see if it flushed out the State.  

Thank you.  Ron 

[BillM223]

First, are you doing this with our Online product or the CD/download product on your desktop/laptop?

You cannot do overrides in the Online product at all. On the CD/download product, you can go into Forms mode (upper right) to see the forms.

"is there any way to manually update the State Form 1? or delete the 1o99 R from the State all return? "

So the answer to the first question depends on the product you are using: Online, no; CD/download, yes.

However, doing an override on your Form 1 in MA, is what's stopping you from filing in the first place. And while you might be able to delete the 1099-R from the state return, I would not recommend it, because I can't be sure what it would do (we would always go back to the federal return and do it there - which you don't want to do here because that would change your federal return).

"As I have already filed my Federal return, I am not comfortable deleting components of it just to see if it flushed out the State.  "

I am asking you to delete and re-add the 1099-Rs. The result should be the same on the federal return as the original. And this gives you a chance to clear whatever that override is on Form 1.

If you don't want to do that, you can print and mail your return.

[MaderGroup87]

Have the same problem and have deleted the 1099R from federal and re-entered same problem.  When entering information for 1099R on Federal Form it presents a screen for Massachusetts Special Handling.  Under Category that best fits this 1099-R question select None of the above since it was a 401k rollover to a rollover IRA (Not Roth).  Section 2 asks for Massachusetts Distribution Amount my 1099-R show not value here so entered 0.00.  Massachusetts Withholding 0.00.  Form accepts entered data just fine.  Then reviewed all items under Massachusetts and was presented with the Error referenced above.  Also tried entering a value for Massachusetts Distribution Amount on the Fed 1099-R form (Example 10.00) but that did not work either Massachusetts review present the same error.  Seems like a defect in the product to me as am running the download version of the product not online version..   Help.....

[Ron_M]

Thank you @MaderGroup87 You described exactly how I entered and the options chosen.   I am also using the downloaded version from CD , the Premier version.   

In past years I have entered 401K rollovers and never experienced this problem as Turbo Tax knew how to handle it on the Massachusetts State return.  I am not sure what happened this year and I hope they investigate as this appears to be a programming  defect.  We shouldn't have to jump through hoops and find workarounds for a paid product.

 @BillM223 what are the next steps and how does this get escalated for a fix?   Also, I already paid for the e-filing of the Mass Return.  Your recommendation to manually file is not acceptable unless I get refunded for the e-file charge.  

[sachinjoshi8187]

Hello Turbo Tax, I am in the same pickle.

Made after tax contributions to the 401k and tried to roll them over to Roth.

This took a few days, so there was some taxable income reported on the 1099-R.

I entered everything including the taxable income (not a tax exempt pension in MA).

Now I have gotten to the last stage of filing and it won't let me file, has already taken the $25 for state efile before identifying this issue.

Please advise.

[sachinjoshi8187]

Manually filing is NOT acceptable solution.

Please fix this

[HopeS]

It is not clear what exactly is the issue you are having with Massachusetts e-filing. If the following suggestion does not work, please repost another question.

However, during the MA state interview, you can enter the amount previously taxed on the "Taxable IRA/Keogh Distributions" screen. Enter the nondeductible contribution amount under "Other contributions previously taxed by Massachusetts"

Review the link below as well for more information/suggestions:

MA Roth Conversion

@sachinjoshi8187 

[sachinjoshi8187]

I deleted everything and started over again and it somehow seemed to work, I have no idea what got fixed but it looks like there is some residual information that isn't propagating through the first time.

Deleting form 1 from the MA tax return and redoing it seemed to work but I have no idea what the issue was the first time around.

[Sabeena]

Thank you, this was the simplest and easiest answer and it fixed my problem too.