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ozwinters
New Member

My state retirement is exempt from state taxes.How do I correct this on my federal return?

 
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2 Replies
KathrynG3
Expert Alumni

My state retirement is exempt from state taxes.How do I correct this on my federal return?

It depends on why it is exempt. Most often, you will still pay federal taxes on your retirement. 

 

For entering this in TurboTax, the best practice is to enter Form 1099-R exactly as you received it. Then, during the state interview, pay careful attention to any adjustments being made. If it is a routinely exempted pension, then TurboTax will automatically exempt the pension income from the state calculation.

 

Please see the 2019 Form 1040 Instructions beginning on page 23 to determine if your state retirement that is exempt at the state level is also exempt at the federal level.

 

 

My state retirement is exempt from state taxes.How do I correct this on my federal return?

Yeah, the full 1099-R is entered in the Federal section, but for most states (but not PA), the place where you indicate that the 1099-R is not taxed by the state (it may still be taxed by the Feds...but that varies)...that is on one of the followup pages right after the 1099-R form is entered.   On that page you have to select the proper source of the 1099-R before thee state forms exclude that 1099-R  (if it is eligible to be excluded).  Each state is different, but here's some examples of what that followup page looks like for several states:

___________________________________

1099R_NewYork.png

_____________________________________

1099R_Kansas1.png

_____________________________

1099R_Massachusetts.png

 

______________________________

 

1099R_Louisiana.png

___________________________

 

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

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