Incorrect pension deduction - NYS

[DMS21]

For NYS, Turbo Tax incorrectly entered $20,000 pension exemption on Line 29 of IT201 in addition to the exemption for NYS & Local Employees Retirement on Line 26 of IT201. How do I remove the incorrect entry on Line 29? Turbo tax help refers back to Federal entries which I have correctly inputted. This error overstates the amount of NYS income tax refund.

[BillM223]

As you all have seen, it is important to correctly classify the pension income for New York State since some pension income (like federal, state, and local government pensions) has different exclusion levels than other pensions.

This misclassification of New York pension income for New York State is a known issue. Please see this TurboTax Help page and sign up to be notified of updates.

[georgehny]

It appears that this problem existed in 2019 as well. It did not impact me now but does this year. We have both a NT state government which is excluded correctly. We also have an IRA distribution which in the range of $7,000 which causes a $20,000 exclusion to be incorrectly applied. It should be only the like amount applied.

I also not the form which correctly bears our ages however the AGE is incorrect and two years behind our actual ages.

This cannot be corrected within the program itself that I can see. So I am ready to file but this prevents me from doing so!!! THIS NEEDS TO BE FIXED has existed since 2019 from what I read here.

George in NY

[georgehny]

After receiving email indicating this would be fixed 2/19/2021 and to update program IT HAS NOT HAPPENED!!! I would like to file my taxes. This does not appear to be a new problem, existed in 2019 according to the boards.

George in NY

[georgehny]

Not a classification error on preparers side this is a PROGRAM error. Though emailed fixed it has not been!!!

George in NY

[georgehny]

Finally looks fixed. What I had to do was FORCE an update. Program kept telling me no updates. 

ON a MAC desktop

Opened Turbo Tax

Went to TT Menu

Held down OPTIONS key on keyboard check for updates becomes FORCE update. Did that and received an update NY State.

Then recieved error on review and returned to Fed reentered retirement information and this time subtraction in NY state return was correct amount no longer the enter 20,000. State gets more of my money but at least now correct!

[lread94781]

How do I correct problem.  NYS Tax Form is not deduction pension payment.

[ReneeM7122]

To handle the New York state pension, you will first have to enter the necessary information in your Federal Income tax return and then in the New York State income tax return.

Here are the steps to enter your New York State employee pension:

On the  Federal Income Tax  portion:

1. In the search or find box, type in 1099-R
2. Click on Jump to 1099-R
3. Scroll down to Retirement Plans and Social Security
4. At IRA,401(k), Pension Plan Withdrawals (1099-R), click Start (or Update)
5. Enter your 1099-R or if you have entered it, click on Edit then Continue
6. Answer the next questions until you get to the Where Is This Distribution From? screen
7. Select the source New York State Employees and enter the information requested:
8. Click on Continue
9. Click on From a Qualified Plan
10. Continue answering the questions

On the New York State return portion: 

1. At the Changes to Federal Income page, scroll down to Received retirement income, click Start (or Update)
2. At the Retirement Distributions Summary page, click on Edit New York State
3. If no additional information is required, click on Continue
4. Click on Done

Review the Pension Deduction Summary.  

@lread94781

[DaveDD]

how do resolve incorrect pension exclusion?  It indicates $20,000 when the entire nys pension is not taxable on the state tax form,   

[MarilynG1]

Yes, you are correct that your NY State Pension income is excluded from state tax.  Be sure you indicated you had a New York State Pension when entering your 1099-R in the Federal section ('Where is this Distribution From?'). 

Previously, some users reported that their full pension amount plus  20K was being excluded on their New York return (creating a larger, incorrect refund).

Click this link for more info on New York Pension Exclusion.