Like many states, Hawaii taxes some retirement income and not other
retirement income.
In these cases, the state interview in TurboTax will normally ask about each
type of retirement income, as to whether or not it is taxable.
In the case of Hawaii, as you go through the state interview in TurboTax,
you will come to one or more pages that are entitled "Exclusion
Amount". You will see one of these for each 1099-R (retirement income)
that you entered on the federal return.
Each screen will ask you the amount of the retirement distribution that is
not taxable in Hawaii (i.e., this amount will be subtracted from federal income
to make Hawaii state income, making the retirement nontaxable for Hawaii).
Note that you do not have to do this for Social Security; it is
automatically removed from your Hawaii state income.
To help you know which is which, please read the section entitled
"Hawaii Subtractions from
Federal AGI
Line 13
Pensions"
in the instructions
for form N-11 at the State website.
This may be the most helpful part, but you should read the whole section to
know whether or not your pension is taxable.
"Employer-Funded Pension Plans
The following three types of distributions are not taxed by Hawaii and should
be included on line 13:
(1) Pension or annuity distributions from a public (i.e., government)
retirement system (e.g., federal civil service annuity, military pension, state
or county retirement system).
(2) Distributions from a private employer pension plan received upon retirement
(including early retirement and disability retirement) if the employee did not
contribute to the pension plan.
(3) Distributions from a pension plan at age 70-1/2 that are made to comply
with the federal mandatory payout rule do qualify as a retirement payment
whether or not the employee is still working full time.
Distributions from a private employer pension plan received upon retirement
are partially taxed by Hawaii if the employee contributed to the pension plan."
