New York State Retiree 1099-R Can't enter info into Turbo Tax

Your 1099-R might say NYS EXEMPT if your 1099-R distribution is less than $20,000 and is a federal, NYS state or local government pension or IRA. Per NYS, taxpayers over age 59 1/2 can deduct up to $20,000 of certain federal, NY state or local government pensions and certain IRAs on their New York return. If married filing jointly, each spouse may deduct up to $20,000. 

Please enter the information in the 1099-R entry form: 

• For Box 14 (State tax withheld), do not enter EXEMPT. Enter $0.
• For Box 15a (State), choose NY.
• For Box 15b (State number), enter as shown on Form 1099-R. 
• For Box 16 (State distribution), enter the distribution as shown in Box 1 (Gross distribution). 

If it is non-taxable in NYS based on the guidelines above, please follow the on-screen instructions and answer the questions pertaining to your 1099-R. In addition, please confirm it is being deducted out of your NYS income.

Please follow these steps in TurboTax to confirm:

1. Open your return.
2. Click on State in the left hand column.
3. Click Edit next to your resident return.
4. Click Update or Start next to Adjustments to federal income on the screen You Just Finished Your New York Return.
5. Scroll down to Wage and retirement adjustments.
6. Click Start next to Received retirement income. 
7. Continue to the screen Governmental Pension Exclusion.
8. Enter $20,000 (or your distribution if less than that amount) for the question, Did you receive a pension or other distribution from a NY State or local government pension plan or federal government pension plan? 
9. The next screen will show your pension deduction summary. Only $20,000 (or your distribution if less than that amount) should be deducted from your pension. 

My understanding is that NY state/local pension exclusion is not limited to 20K.  It is not state taxable, period.  What works for me on 1099R (after much trial and error) is:

Box14 - leave blank

Box15 - leave as is

Box 16 - make it 0.

Also check the NY Pension/Annuity worksheet to make sure everything is as it should be.

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@bgrossm1 wrote:

My understanding is that NY state/local pension exclusion is not limited to 20K.  It is not state taxable, period.  What works for me on 1099R (after much trial and error) is:

Box14 - leave blank

Box15 - leave as is

Box 16 - make it 0.

Also check the NY Pension/Annuity worksheet to make sure everything is as it should be.

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If no tax withheld in box 14 the leave all boxed 14-16 BLANK. 

I believe you are correct, NY state and local pensions are not NY taxable at any level.  The $20,000 limit is for non-governmental retirement income, which is the problem that I am running into.  My husband and I each took $20,000 out of our retirement accounts after we turned 59 1/2, and the program is pro-rating it, treating it like we collected it monthly throughout all of last year.  This means that 2 months of my husband's and 9 months of my distribution would not qualify for the $20,000, so our NY taxable income is showing more that $18,000 more than it should be.  Does anyone know how to correct that?

There is a major issue with TurboTax and NYSLRS pensions which was first reported in June 2020! At this point they haven't fixed it but they actually made it worse. It appears that the so called TurboTax support experts don't understand and don't want to understand that NYSLRS entire pension amount is exempt from NY taxes. The TurboTax programmers made changes to the online version recently, which I hope they don't think they fixed the issue of the $20,000! The change they made does not allow us to enter the entire amount of our NYS pension as a deduction from NYS taxes!

See the following tread;

https://ttlc.intuit.com/community/state-taxes/discussion/re-incorrect-nys-pension-exclusion/01/1943489#M84509

Lena,

New York State pensions are exempt from taxes in their entirety in the State of  New York, period!

The issue with TurboTax online application its not following the instructions for the NY form IT-201. 

The following is from Form IT-201

Line 10 - Taxable amount of pensions and annuities. If received as a beneficiary, mark an X in the box.  $xx,xxx (represents the entire NY pension amount).

Line 29 - Pension and annuity income exclusion (see page 19)  = $0.0

When we enter our NYS pension on line 10, Line 29 = $0.0 (see above). The issue with TurboTax is the application is entering $20,000 on line 29 even though we are entering our New York pension on line10.

See  the following excerpt from instructions for IT-201.

Line 29 – Pension and annuity income exclusion
Did you enter an amount on line 9 or 10 that was not from a NYS
or local government pension plan or federal government pension
plan? If No, go to line 30.

TurboTax has lost many New York customers due to this issue. I suggest you it gets corrected ASAP. 

New York customers are currently experiencing an issue in TurboTax causing their New York pension exclusion to be incorrectly calculated.

We expect this issue to be resolved by 02/19/21. If you’d like to receive progress status updates, please sign up here.

My State Return was rejected yesterday. Now I have gone back to make some changes that TurboTax has requested ( Tax preparation fees) and told me to do. Ran my New York return again and now it is telling me that my pension needs to be changed. The pension numbers came off my  1099-R so i will not be changing them. None of my New York State pension is taxable by NY (even if it goes above $20000). I need to fix this ASAP. TurboTax the ball is in your court FIX IT!!!!!

I just got off the phone with the TurboTax Resolution desk (management staff) and was advised that the programmers at TurboTax are working on the issues with the bogus $20,000 deduction entry and our pension entry for NYS deductions being removed.

I am still getting the same error with my New York State return. When I opened TruboTax today there was no update to download. I went to the online tab and manually attempted to update but was told that i was currently up to date.  The error message that i am getting is the following:

Check This Entry

Pension/Annuities?IRA Worksheet: Govermental pensions exclusion-Taxpayer is not a valid amount. Please remove the amount and go back to federal 1099-R to make the appropriate choice for the source of each distribution. 

Part II, Line 2c TP

At this spot I have the same number that is on my 1099-R box 1. The following entry #3 is the Federal Taxable amount which is $6 less. Any ideas on how or what to enter to make this work? It appears that TurboTax is clueless and really does not care to fix this. 

I am still getting the same error with my New York State return. When I opened TruboTax today there was no update to download. I went to the online tab and manually attempted to update but was told that i was currently up to date.  The error message that i am getting is the following:

Check This Entry

Pension/Annuities?IRA Worksheet: Govermental pensions exclusion-Taxpayer is not a valid amount. Please remove the amount and go back to federal 1099-R to make the appropriate choice for the source of each distribution. 

Part II, Line 2c TP

At this spot I have the same number that is on my 1099-R box 1. The following entry #3 is the Federal Taxable amount which is $6 less. Any ideas on how or what to enter to make this work? It appears that TurboTax is clueless and really does not care to fix this. 

Yesterday I was advised that the issue is not fixed and that the TurboTax programmers are still working on the New York State Pension issue. I think the manager I spoke too said this could take another week or two.

See all the angry comments in this discussion.  TurboTax is preventing me from filing my federal tax due to the bug in addressing NYS pensions.  While doing step by step TurboTax says "if box 14 says EXEMPT, leave it blank."  The last step check by Turbo Tax rejects filing federal and asks for updates to 14and 16 of NYS.  The ostensible error check is that box 14 (withheld) can't be = or more than box 16 (gross distribuiton).  No matter what you put in 14 ($0.00 is the only truthful value) and 16 (box 1 gross or box 2a taxable)  the error keeps you looping through rejection after rejection.  Numerous contributors have noted the problem with TurboTax and it doesn't seem that difficult to correct. 

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@grandpaknei wrote:

See all the angry comments in this discussion.  TurboTax is preventing me from filing my federal tax due to the bug in addressing NYS pensions.  While doing step by step TurboTax says "if box 14 says EXEMPT, leave it blank."  The last step check by Turbo Tax rejects filing federal and asks for updates to 14and 16 of NYS.  The ostensible error check is that box 14 (withheld) can't be = or more than box 16 (gross distribuiton).  No matter what you put in 14 ($0.00 is the only truthful value) and 16 (box 1 gross or box 2a taxable)  the error keeps you looping through rejection after rejection.  Numerous contributors have noted the problem with TurboTax and it doesn't seem that difficult to correct. 

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If box 14 does not have a dollar amount in it then there is no stat tax withheld.   The 1099-R rules say when there is not tax withheld then leave boxed 14-16 BLANK.       Putting anything in those boxes violates the 1099-R rules, but some payers write things there anyway and it causes errors in software that follow the rules.

For a moment I had hope.  But no, putting 0 in box 16 and leaving 14 blank did not get past the turbotax bug.  With numerous experiments,  I have proven that turbotax thinks that 0 is not less than 0 , that 0 is not less than 0.01, that 0 is not less than $35,000.00.  I believe TurboTax's online directions have not changed regarding NYS pensions in that if it says EXEMPT , leave it blank.  The 2019 1099-R in the equivalent boxes 12 and 14 which I am sure I left blank when completing the form are stored in my return with $0.00 in both the state withheld and distributed boxes.

Irene2805 (Employee Tax Expert) mentioned you in a post! Join the conversation below:
Re: Form 1099-R states NYS withholdings cannot be greater than or equal to gross distribution.
On your 1099-R, since the NY pension is not taxable, leave boxes 14, 15, and 16 blank. This should prevent the error messages and let you e-file your return.
Grandpaknei:
Thanks Irene. Since Turbo Tax filled in the State and State ID automatically I did not think to blank out box 15. Also shame on me for not noticing that the state id number provided didn't match the one on the paper 1099-R. I have for years left 14 and 16 blank based on Turbo Tax help notes. I hope the notes are as clear as you were: if box 14 says exempt: “leave boxes 14, 15, and 16 blank.”

To be specific, what worked for me was to go to forms immediately upon starting TurboTax and blanked out those boxes in the 1099-R and was then able to proceed with filing without any other re-entry of data.

Irene2805 (Employee Tax Expert) mentioned you in a post! Join the conversation below:
Re: Form 1099-R states NYS withholdings cannot be greater than or equal to gross distribution.How...
On your 1099-R, since the NY pension is not taxable, leave boxes 14, 15, and 16 blank. This should prevent the error messages and let you e-file your return.
Grandpaknei:
Thanks Irene. Since Turbo Tax filled in the State and State ID automatically I did not think to blank out box 15. Also shame on me for not noticing that the state id number provided didn't match the one on the paper 1099-R. I have for years left 14 and 16 blank based on Turbo Tax help notes. I hope the notes are as clear as you were: if box 14 says exempt: “leave boxes 14, 15, and 16 blank.”

To be specific, what worked for me was to go to forms immediately upon starting TurboTax and blanked out those boxes in the 1099-R and was then able to proceed with filing without any other re-entry of data.

Thanks for sharing the info!

I have the same error message (The ostensible error check is that box 14 (withheld) can't be = or more than box 16 (gross distribuiton).  No matter what you put in 14 ($0.00 is the only truthful value) and 16 (box 1 gross or box 2a taxable)  the error keeps you looping through rejection after rejection. ) prevent me efile NY state for 2022 tax return.  Any suggestion?

Yes, if you have no state income tax withheld, you can leave boxes 14, 15 and 16 blank. Not 0, but blank.

You may need to correct this on your 1099-R screen:

1. Open your return and make sure you are in the Federal section.
2. Select Wages & Income.
3. Find IRA, 401(k), Pension Plan Withdrawals (1099-R), on the list, click Start or Review to the right. 
4. Select Edit to the right of the 1099-R. If you see a circle with three dots, click on it and select Edit.
5. Click Continue until you get to Enter your 1099-R details from (name).
6. Scroll to the bottom and delete any entries for boxes 14, 15 and 16.
   Continue to the next screen, then select Review from the menu. 
7. Continue until you re-submit your state return for e-file. 

How can I enter that my income is exempt from nys taxes

Your 1099-R might say NYS EXEMPT if your 1099-R distribution is less than $20,000 and is a federal, NYS state or local government pension or IRA. Per NYS, taxpayers over age 59 1/2 can deduct up to $20,000 of certain federal, NY state or local government pensions and certain IRAs on their New York return. If married filing jointly, each spouse may deduct up to $20,000. 

Please enter the information in the 1099-R entry form: 

• For Box 14 (State tax withheld), do not enter EXEMPT. Enter $0.
• For Box 15a (State), choose NY.
• For Box 15b (State number), enter as shown on Form 1099-R. 
• For Box 16 (State distribution), enter the distribution as shown in Box 1 (Gross distribution). 

If it is non-taxable in NYS based on the guidelines above, please follow the on-screen instructions and answer the questions pertaining to your 1099-R. In addition, please confirm it is being deducted out of your NYS income.

Please follow these steps in TurboTax to confirm:

1. Open your return.
2. Click on State in the left hand column.
3. Click Edit next to your resident return.
4. Click Update or Start next to Adjustments to federal income on the screen You Just Finished Your New York Return.
5. Scroll down to Wage and retirement adjustments.
6. Click Start next to Received retirement income. 
7. Continue to the screen Governmental Pension Exclusion.
8. Enter $20,000 (or your distribution if less than that amount) for the question, Did you receive a pension or other distribution from a NY State or local government pension plan or federal government pension plan? 
9. The next screen will show your pension deduction summary. Only $20,000 (or your distribution if less than that amount) should be deducted from your pension.