I am filing 1041 w Turbotax business for Estate. Do I list the CT state tax withheld from retirement distribution on 1099R on the "Other Tax Withholding" section on 1041?

[tagteam]

You would enter any state income tax paid or withheld during the tax year as a deduction in Taxes.

[Irene2805]

Yes - Enter the state withholding from the 1099-R in the he "Other Tax Withholding" section of the 1041.

[tagteam]

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@Irene2805 wrote:

Yes - Enter the state withholding from the 1099-R in the he "Other Tax Withholding" section of the 1041.

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Unless I am mistaken, I believe that particular section is for federal income tax withholding, not state income tax withheld.

[praemart]

Thank you both for your response. This is helpful, but now I need to clarify. I can list the Federal Income tax withheld (box 4 1099R) and CT state tax withheld (box 12 1099R) in the "Other Tax Withholdings" part of Additional Tax Payments sections of Federal Taxes on 1041? I will send the 1099R with my 1041.

Thanks again

[praemart]

Does this mean you do NOT enter the CT State tax withheld? On Schedule G line 14 of the 1041 tax form, it states: " Federal income tax withheld. If any is from Form9s) 1099, check here > ". So this is where I wonder if the total amount of federal and state gets placed, and do I check the box for 1099 since the tax withheld comes from 1099R?

[tagteam · Accepted solution]

The line to which you are referring is for federal income tax withheld, not state withholding.

Any state withholding is reported on the return as tax paid (under Taxes in the program) and also reported on the state income tax return.

[praemart]

Turbotax Business for estate, 1041 gets confusing. When listing the CT state tax withheld from the annuity under"Taxes", it then asks: enter taxes paid for allocable taxable income. If I enter the amount under the State and Local Income tax, it then goes to the next screen to enter tax exempt income. Do I leave that section as 0? 

Thanks for your help. 

[tagteam]

@praemart That is because you cannot deduct expenses from tax-exempt income. If you have none, then you simply leave that at zero (as you indicated).

[IreneS]

In the 1041 return in TurboTax Business, enter the state withholding under Taxes.

To do this:

1. Click Federal Taxes > Deductions.
2. In the Expenses, taxes and fees section, click the Start/Update box next to Taxes.
3. On the next screen, Taxes, enter the State and local income taxes entered on the 1099-R.   Make sure it's the screen that says "allocable to taxable income."  See screenshot, below.

[Edited | 3/17/2020 |  1:08pm PDT]

[IreneS]

You are correct.  I tried to edit my post but was unable, so I entered a new one.

[cwdjr1964]

I am in a similar situation with regard to my MD state taxes. I mistakenly had MD state taxes withheld for tax year 2022 from my mother's annuity death benefit. I entered the information correctly into TT Deluxe as you said. The amount that TurboTax produced on line 11 on Form 1041 was less than the amount I inputted. TT doesn't seem to be accurately transferring the information from the Deduction Allocation Smart Worksheet to Line 11 on Form 1041. I am not even able to change that amount in forms mode. Any help would be much appreciated. Thank you.

Update: Disregard. I see that there is a maximum limit for this deduction on the IRS Website.