How can I check to ensure that my military retirement pension is being properly excluded in my Maryland state tax return?

[jtsommer43]

I see multiple other categories of retirement pay exclusions (law enforcement, firefighter, rescue, etc.) but was not asked about the nature of my pension payments during this 2022 TurboTax session. I seem to recall it being specifically called out in the past. There were no questions nor opportunities to differentiate this retirement pay for 2022 and no statements or evidence informing me that a portion of the pension payments was exempt from Maryland state tax.

[Cynthiad66 · Accepted solution]

To ensure that you receive the military retirement exclusion you must answer all military questions accurately.   Note:  TurboTax will compute this exclusion for you automatically if your entries are accurate.  

For instance, in the personal information section of TurboTax, it asks both taxpayers if they are or were military.  If you answer those questions accurately, TurboTax will automatically setup the return for the exclusion.    Note:  TurboTax will compute this deduction for you automatically if your entries are accurate.

After you enter your 1099-R, TurboTax will ask the additional questions below.

1. On the screen “Where is your distribution from?” select Active or reserve military retirement, then continue
2. On " What kind of retirement plan do you have with Defense Finance and Accounting Service?” select Non-qualified plan

To ensure that you received the exclusion you may preview the return to see if the exclusion was applied.

Using TurboTax Online you can view the return while in progress.  Preview your return by following the steps below.

You can view your entire return or just your 1040 form before you e-file:

1. Sign in to your TurboTax account.
2. Open or continue your return.
3. Select Tax Tools from the menu (if you don't see this, select the menu icon in the upper-left corner).
4. With the Tax Tools menu open, you can then:
   • Preview your entire return: Select Print Center and then Print, save or preview this year's return (you may be asked to register or pay first).
   • View only your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 or for 502 Maryland in the left menu.

See sample below of the Maryland Resident Income Tax return.  Line13 will show you the amounts of the pension exclusions for 2022.

Military Retirement Income. Individuals at least 55 years of age on the last day of the taxable year may claim up to $15,000 of military retirement income, including death benefits, received in the taxable year. Individuals under the age of 55 on the last day of the taxable year may claim up to $5,000 of military retirement income received in the taxable year..

If you need additional assistance, please come back to this forum.