My LIRR w-2 for a non-qualified pension, is not taxed in NYS, your program does not recognize this. I have to manually override my state form which then prevents me from

[gweh204]

WHY CAN'T YOU UPDATE YOUR  PROGRAM TO CORRECT THIS PROBLEM

[IreneS · Accepted solution]

Since your LIRR pension is reported on a W-2, and not a 1099-R it is not receiving the pension exclusion benefit on the New York State return.

As a workaround, report your pension distribution on the 1099-R entry screen, instead of a W-2.  If this is a normal distribution, select code 7 in box 7 of the 1099-R

To enter the information from your 1099-R in TurboTax, please follow these steps:

1. Click on Federal Taxes > Wages & Income  [In TT Home & Biz:  Personal > Personal Income].
2. Scroll down to the Retirement Plans and Social Security section and click on the Start/Revisit box next to IRA, 4701(k), Pension Plan Withdrawals (1099-R).  
3. On the Your 1099-R screen, click Yes and then Continue.
4. Click on the I'll type it in myself box.  
5. After entering the information on the 1099-R screen, you will be brought to the screen, Where is this Distribution From?  Mark the button for Certain Public Authorities and enter the NY Distribution Amount.  Click Continue. 

When you go into your New York return, the pension from LIRR will be excluded from NY taxable income.

[Edited | 4/15/2020 | 8:00am PDT]

[rdwlepkows]

So if I did work for a railroad, do I enter the full amount or what?

[randy56]

This seems like a lousy solution. Taking an official W-2 and then entering it as a 1099-R just to work around a deficiency in the program doesn't make sense. If we are issued a W-2 for a non-qualified pension that is not taxable at the state level, the program should be able to handle that situation. Alabama has the same situation and even if you over ride the entry, the program will not let you file electronically.

[Irene2805]

Since the distribution from LIRR is a non-qualified pension, it should be reported in Box 11 of your W-2.  If Box 1 is blank, enter zero (0).  Please enter the LIRR pension using the steps below:

TurboTax Online  

A few screens after the W-2 entry screen, you will see Did you take money out of your nonqualified pension plan?  Mark the Yes radio button and click Continue.  [Screenshot #1]

Screenshot #1

TurboTax CD/Download

1. A few screens after the W-2 entry screen you will see Do any of these uncommon situations apply to this W-2?  Mark the box for Pension plan.  
2. On the screen, Tell Us More About Box 11 Income, click the Yes box.

Screenshot #2

Screenshot #3

[randy56]

I have already done what you are suggesting. The program still wants to treat the amount in box 11 as a state income even though boxes 15-18 are blank. the only thing I could do is override the amount that the program placed in income from other states. That prevented me from being able to file my state tax return electronically. When I tried to get it to ignore the error, it went into an old fashioned "do loop" and went back to the screen to suggest that remove the override. 

[ReneeM7122]

To get the State pension deduction,  you will first have to enter the necessary information in your Federal Income tax return and then in the State income tax return.

Here are the steps to enter your exempt State employee pension:

On the  Federal Income Tax  portion:

1. In the search or find box, type in 1099-R
2. Click on Jump to 1099-R
3. Scroll down to Retirement Plans and Social Security
4. At IRA,401(k), Pension Plan Withdrawals (1099-R), click Start (or Update)
5. Enter your 1099-R or if you have entered it, click on Edit then Continue
6. Answer the next questions until you get to the Where Is This Distribution From? screen
7. Select the source State Employees and enter the information requested:
8. Click on Continue
9. Click on From a Qualified Plan
10. Continue answering the questions

On the State return portion: 

1. At the Changes to Federal Income page, scroll down to Received retirement income, click Start (or Update)
2. At the Retirement Distributions Summary page, click on Edit State
3. If no additional information is required, click on Continue
4. Click on Done

Pension and annuity 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

NYS Division of Corporations

@randy56

[grant137]

What about suppling the TIN when my W2 only has the EIN? I did the work around as described but my return was rejected because the W2 only has the EIN and found out that's not the correct number to use.

[grant137]

Thank you. When I got to the state return and answered the questions the NY State tax was deducted. I tried first treating the w2 as a 1009R but when it came time to record the TIN I used the EIN and my return was declined.