Does Utah tax exempt military retirement pension? If so, why is it I don't see that in turbo tax?

[AmyC]

Credit, not exempt. The difference is in how it is reported. Utah requires you to enter your military pension. Then, Utah gives you a credit equal to the tax liability on the amount, not to exceed your tax liability. You can read more at Utah Military Pension Credit.

[catherineknaus]

Why is it I don't see this credit? Nor does Turbo ask this question.

[AmyC]

Turbo asks military questions throughout the program and moves it as needed. As long as you answered each military questions, the program would handle the Utah income. Please review your Utah tax return and look for code AJ under exemptions.

 If you are using the online version:

1. go to Tax Tools,
2. then select Tools,
3. select View Tax Summary,
4. on the left side, select Preview My State
5. View your state return to see that the income is being taxed correctly.
6. If not, go back to the personal section and review answers and then go through the 1099 input screen.

[catherineknaus]

Hi again, 

I went thru everything again.  I see no code AG and no credit on the tax summary.  I can't  actually view the TC -40 form just the state tax summary.  My credit is not above the tax liability either. The program never asked me about this credit.   

Thanks,

Cathy

[catherineknaus]

Sorry I meant to say code AJ...

[BillM223]

As noted above, the change to the tax code in Utah was that taxpayers receiving military retirement income receive a nonrefundable tax credit of 4.95% of the distribution reported in income, so the military retirement still appears as taxable income but a credit is applied to compensate for it. See this Utah page.

NOTE: you can't take the military tax credit if you claim either the Social Security Benefits Credit or the Retirement Credit. Please see this Utah page.

TurboTax will identify which of the credits gives you the best result and apply it automatically.

We have identified an issue with the military retirement credit in Utah and are researching it.

[catherineknaus]

Hi again, 

I understand what you are saying about it being a credit but I don't see this credit nor is Turbo Tax allowing me a choice to use it.  You mentioned that there may be an issue with the Utah military retirement credit, can you please let us know what you find out? 

Thanks,

Cathy 

[TeresaM]

Yes, our team is working on updating the Utah state military retirement credit area. Please see this TurboTax Help Article with a link to sign up to receive updates.

Utah Military Retirement Credit updates