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spill4917
Returning Member

How come Turbo Tax keeps telling me I owe state taxes when NYS does not tax any of my retirement income since it all comes from NYS retirement and SS?

 
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5 Replies
LenaH
Employee Tax Expert

How come Turbo Tax keeps telling me I owe state taxes when NYS does not tax any of my retirement income since it all comes from NYS retirement and SS?

In the TurboTax software, please make sure that you picked the correct classification in the software if your 1099-R is fully exempt

 

Your pension income is not taxable in New York State when it is paid by:

  • New York State or local government
  • the federal government, including Social Security benefits
  • Certain public authorities

Please follow these steps and make sure all the required fields are completed:

  1. Open your return.
  2. Search 1099-R with the magnifying glass tool. 
  3. Click Edit next to the 1099-R you want to correct.
  4. Enter the information as shown on your 1099-R. 
  5. Answer the questions on the next two screens.
  6. Make sure the correct source of your 1099-R is selected.
  7. Click on From a qualified plan on the screen Was this distribution from a qualified plan?
  8. Answer the required minimum distribution questions on the next screen.
  9. Finish answering the questions about your 1099-R.
  10. Once you are back to your federal 1099-R summary screen, click on the StateTaxes tab above.
  11. Click on Edit for New York.
  12. Click Start next to Received Retirement Income on the screen Changes to Federal Income
  13. Click Edit next to your 1099-R.
  14. On the page Pension Deduction Summary, you will see New York deduction for government pensions for the full amount (see below).

Lastly, all Social Security retirement benefits are exempt from NYS taxation.

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spill4917
Returning Member

How come Turbo Tax keeps telling me I owe state taxes when NYS does not tax any of my retirement income since it all comes from NYS retirement and SS?

I have followed your advice but I still owe taxes according to Turbo Tax. I have been using the

Deluxe version of Turbo Tax. I have gone thru 1099-R area but nothing works.

Total Federal taxable non-distributions        $55,003

NY deduction for government pensions                   0

NY deduction for Railroad pensions                           0

NY deduction for other pensions                   $20.000

 

Total taxable pensions and IRA

distributions                                                        $35,003

This is what I get.

 

FangxiaL
Expert Alumni

How come Turbo Tax keeps telling me I owe state taxes when NYS does not tax any of my retirement income since it all comes from NYS retirement and SS?

Make sure that the IRA/SIMPLE/SEP box is not checked. 

 

@spill4917

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spill4917
Returning Member

How come Turbo Tax keeps telling me I owe state taxes when NYS does not tax any of my retirement income since it all comes from NYS retirement and SS?

It's not checked.

LenaH
Employee Tax Expert

How come Turbo Tax keeps telling me I owe state taxes when NYS does not tax any of my retirement income since it all comes from NYS retirement and SS?

Please confirm that you marked off your pension as coming from NYS and/or local governments by checking off option #1 (see screenshot below). 

 

This will carry over to the NYS return and exempt your NYS pension income because it is paid by NYS or local government. 

 

@spill4917

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