NYS RETIREMENT/NYS INCOME TAX

[SaraG2]

Since 2014, I have been doing my taxes on Turbo Tax,  I thought I was so smart and also thought it was just a matter of inputing information and Turbo Tax would do the rest correctly.    My husband and I live in NYS and I get my retirement from the NYS Local Employee Retirement and my husband gets his from the NYS Teachers.  Seems like that should be enough for Turbo Tax to know we worked for NYS and should have been exempt from NYS Income taxes on our retirement.  But no that was not the case, for I have paid NYS income tax for the last 7 years.   We did get an exemption but not enough to keep us from paying quite a bit in NYS taxes.  My brother in law kept telling us we should not be paying NYS income tax on NYS retirement but I knew that Turbo Tax would not have let me if that was the case.  Finally I decided to check it out and he was right I should not have been paying NYS income tax on our NYS retirement.  Unfortunately I could only get 3 years back by doing 3 years of  amended taxes.  Really 2 years so far, I am still waiting for the last check.  So I gave NYS almost $1,000 that I shouldn't have given them for the other 4 years.   I admit part of it is my fault for apparently not answering some questions the right way and having too much faith in Turbo Tax.   From other complaints I have seen I think Turbo Tax falls a little short where this is concerned.  I think they could and should do a better job on this issue.

[SteamTrain]

Yeah, it can be somewhat of a problem, but you do really need to ID the exact source of that 1099-R on a follow-up page...as I hazily recall (and could be wrong) , some of the NY public pensions have a more limited deduction, and just entering the 1099-R does not specifically ID what public entity generated those pension distributions.

From a prior year picture I took, your NY sourced selections follow-up page should look something like this when you enter the 1099-R in the Federal section:

_________________________

[SaraG2]

The way I thought it worked and I could be wrong is that if you live in NYS and draw a NYS retirement it was NYS income tax exempt but other retirements had a $20,000 exemption.

[Opus 17]

Read this to start familiarizing yourself with New York State‘s treatment of retirement income.

https://www.tax.ny.gov/pdf/publications/income/pub36.pdf

[bhw961]

The Turbotax Deluxe product is not treating the NYS Retirement System pension as exempt from NYS taxes. I have used Turbotax Premier for years and had no problem. This year we have a less complicated situation and so decided to purchase Turbotax Deluxe instead. This product does not calculate my taxes correctly. Specifically, the "Where Is This Distribution From?" list that is part of the 1099-R entry process doesn't include the source needed to qualify the pension as exempt in New York. I have a screen shot for show and tell, but do not know how to post it in this forum. See the screen shot already posted that shows the selection "New York State and Local Retirement System (NYSLRS)" that shows there does not show in the version of Turbotax I am trying to use. What is really disconcerting is that forum posts going back several years have complained about this same problem. Attempts to get past the automated support system to share this with a real person have been frustratingly futile. Looking for help. Thank you.

Brian

[Opus 17]

@bhw961 

What version of the program are you using?

If you are not seeing NYSLRS as an option when entering the 1099-R, a screenshot will be very helpful.  You can post it by editing your prior question or posting a new reply and click the Camera Icon in the tools menu above the text entry box. 

[SteamTrain]

@bhw961 

Just checking....but, you do still live in NY don't you?

[bhw961]

Thank you for following up!

[bhw961]

Yes, still in New York.

Thanks!

[Opus 17]

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@bhw961 wrote:

Yes, still in New York.

Thanks!

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I notice that while NYSLRS is missing from your program version,  "other pensions from NY state and local governments" is a new category in your version.  Click the "learn more" link, does that category include NYSLRS?

[bhw961]

Hmmm. The Learn More pop up has a catch all description as follows: "You can deduct certain federal, New York state or local government pension distribution from your New York income. Government pensions include those from these sources: - US Government..., - Military, - New York State, including State and City Universities of New York and New York State Education Department ..., - etc, etc"

When I click on the "See Examples" link by the "other Pensions..." line, I get a pop up titled "Other Pensions of New York State and Local Governments" followed by "For additional information, see New York Publication 36: General Information for Senior Citizens and Retired Persons.  Note: If you are a nY state employee with a deferred compensation 457 Plan, select 'None of the Above' for distributions from that plan." 

So, I will check the "Other Pensions..." button and see what happens. 

[bhw961]

I reentered data and checked the button on our 1099-R's and our NY Refund went from owing almost $5,000 to a refund of $857. That's a big change from where we were. I will go back through and check everything again, but it appears you have solved my problem!!

Thank you!

[SteamTrain]

Ahhhh, the category selections have changed some for 2021, but it's still there with a different name.