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On the MD return, there is not a tax credit on military retirement, but there is a deduction from your taxable income. According to the instructions for MD Form 502:
Up to $5,000 of military retirement income received by a qualifying individual during the tax year if the taxpayer has not yet attained the age of 65; or up to $10,000 of military retirement income received by a qualifying individual if the taxpayer is age 65 or over.
TurboTax will take care of including this deduction.
When you go into your MD return, you will see a screen, Here's the income that Maryland handles differently. You will see the MD Pension exclusion at the top of the screen. [Screenshot #2]
I do not have any of the options shown for the Maryland pension screen after the 1099-R info has been entered. After selecting the None of the above check off, what do I enter into the Maryland Distribution Amount field?
You can put the 1099-R distribution amount minus the exclusion amount according to your age in that box and it will be deducted from your Maryland return.
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