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posted Jun 4, 2019 2:11:58 PM

How do I reverse TurboTax's erroneous subtraction of regular Social Security Benefits on AZ-140, Line 31.

Arizona does not tax Social Security Title II Disability Benefits.

Arizona does tax regular Social Security Benefits.

TurboTax erroneously subtracts regular Social Security Benefits on AZ-140, Line 31.

How do I correct this error & reverse TurboTax's subtraction of regular Social Security Benefits on AZ-140, Line 31 so I can file my taxes?

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1 Replies
Level 13
Jun 4, 2019 2:11:59 PM

As I answered on your other posts, Arizona does not tax "Title II Social Security benefits". Title II is the description of the entire Social Security program, not just the disability part.

Please look at the Title II language at https://www.ssa.gov/OP_Home/ssact/title02/0200.htm . It refers to both the Federal old-age and survivors insurance trust fund and federal disability insurance trust fund. The Federal Old-Age and Survivors fund is the fund that pays regular Social Security benefits (see Section 202 and following), while the Federal Disability fund pays for disability (see Section 220 and following).

Therefore, Title II refers to regular Social Security benefits as well as disability.
 

To be clear, TurboTax is not the only institution that believes that Arizona does not tax Social Security benefits. Please see https://www.fool.com/retirement/2018/03/06/the-37-states-that-dont-tax-social-security-benefi.aspx (the "fool" is the Motley Fool, a long-time financial planning site), https://www.kiplinger.com/slideshow/retirement/T051-S001-states-that-tax-social-security-benefits/index.html , http://money.com/money/4502741/social-security-state-taxes/ , and https://taxfoundation.org/monday-map-state-income-taxes-social-security-benefits

If you were told differently, that person who told you is mistaken to say that Arizona taxes Social Security benefits.