NY State has a $20,000 exclusion for qualified pension and annuity income yet in the Deluxe addition the IT-201 shows no entry for NYS IT-201 Line 29. How do I fix this?

[barry16]

This is first year using TurboTax.  Checking prior returns, paid preparers had an entry for NYS IT-201 Line 29.  There is no entry on the TurboTax draft 2020 NYS IT-201 for Line 29.

[ChenC]

Turbotax calculates line 29 for you based on your 1099R input. Please go back to Federal and review your 1099R to make sure your entry is correct.

[LenaH]

The adjustment to exclude $20,000 from your NYS income is done under Wage and retirement adjustments. This is found on the NYS screen Changes to Federal Income. 

You would qualify for the pension and annuity exclusion of up to $20,000 in NYS, as long as your pension is taxable to New York, and you are over the age of 59 ½ or turn 59 ½ during the tax year. If married filing jointly, each spouse may deduct up to $20,000, which would total $40,000 per tax year. 

You can follow these steps in TurboTax to get to the correct NYS screen:

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. Follow the on-screen instructions. 

For more information, please see Publication 36.

@barry16

[h-petrovs]

Hi.  My pension distribution (loan offset) in 2020 was $9,831.  In doing 2021 return I went back to 2020 for review and saw that the NYS income adjustment to Federal for the pension exclusion was only $4,096.  I can't figure out how this number was calculated.  It seems it should be the whole amount of $9.831 which is below the maximum $20k exception for single. 

I saw some notes that said there was a glitch and you should go back and update TT and then go through 1099 R entries again.  My return was filed but I created a duplicate copy to see if I could do that and if it would change.  But it did not.  

Can you help please? Diana

[h-petrovs]

just figured out that the reason it was less is that turned 59 1/2 mid year so it was prorated.  But is the qualified loan offset distribution during covid from being terminated prorated for age?  I see there is a box  in TT to check on the worksheet to make it qualify for 100% up to 20k if it meets all other requirements than age.  Can someone advise.

[LenaH]

No, that New York state rule was not terminated for 2020.  If you became age 59½ during the tax year 2020, the exclusion is allowed only for the amount of pension and annuity income received on or after you became 59½, but not more than $20,000. 

That box is for certain types of pensions. Per Publication 36, qualified pension benefits or distributions received by officers and employees of the United States, New York State, and local governments within New York State, are exempt from New York State, New York City, and Yonkers income taxes. This subtraction modification is allowed regardless of the age of the taxpayer or of the form the payment(s) take. 

@h-petrovs