Pension Plan Income Tax Exemption in Iowa

[Deb-J]

Iowa has passed legislation to exempt retirement income from state income tax. Turbotax appears to be showing my pension income as taxable. Since it became classified as non-taxable income in Iowa, the investment folks stopped Iowa withholding. Now it shows I owe a bunch of taxes plus penalty which isn't correct since the income from the IRA isn't taxable. This money was all transferred in 2022 to an IRA and is all from the work 401(k). How do I fix this in Turbo Tax?

[BillM223]

Did you see this question on this Iowa interview: "IRA distributions NOT reportable to Iowa"?

You likely thought (as others did), that you should put in your pension amount because your pension is excluded in Iowa.

However, this is not asking if the pension amount is excludable from Iowa. It is asking if the pension is subject to state law.

You should enter 0 if your pension is excludable in Iowa.

We have asked the Developers to review this screen, since the wording is unclear in its meaning.