My IRC125 and 414(H) payments are taxable in NYS but do not transfer from Federal to State return. Every year I get additional assessment and $27-$67 interest.

[DonnaO]

This information from the NY Dept of Taxation and Finance website might also be helpful:

Public employee retirement contributions, usually shown on a paper Form W-2 in box 14 as “414(h)”, "Pub Ret", "NYS Ret Cont", etc. (e.g., “414 (h) 750.00”) may be subject to NYS tax even though they are not subject to federal tax. ALL NYS public employee retirement contributions, EXCEPT Long Island Railroad and Staten Island Railroad, are subject to NYS tax. Public employee retirement contributions from other states are not subject to NYS tax. The following 414(h) retirement contributions shown on federal form W-2, Wage and Tax Statement, ARE TAXABLE by New York State:
*    A member of the New York State and Local Retirement systems, which include the New York State Employees' Retirement System and the New York State Police and Fire Retirement System.
*    A member of the New York State Teachers' Retirement System.
*    An employee of the State or City University of New York who belongs to the Optional Retirement Program.
*    A member of the New York City Employees' Retirement System, the New York City Teachers' Retirement System, the New York City Board of Education Retirement System, the New York City Police Pension Fund, or the New York City Fire Department Pension Fund.  

Based on the NY Dept of Taxation and Finance rules for electronic filing, if your 414h contributions are not taxable then you will have to print and mail your return.

[ED42]

This is also has happened to us. We just got a letter for 2 years of tax returns saying we owe back taxes, plus interest, because our state return did not include it in our  as part of our income. We also likely need to submit an amended return for 2018. Not sure of the root cause w/the transfer from federal to state not working, but definitely not happy.

[AMKW]

I've just encountered this too. It's infuriating - how is TurboTax not held accountable for this? We're relying on their software and there's a clear error here that we're unlikely to pick up on when going through their system. What's the deal with the interest on the penalty, does anyone know? It seems unfair to be charged interest on a penalty for a 2017 return that I've only just found out about...

[Jimmyb820]

You're right because every year this happens to me and i put the correct information. I called the IRS and was told I have to pay taxes on it and need to figure out how much i need to pay the taxes on the 414(H) and IRC 125. I think I'm not going to use Turbo Tax anymore.

[gyaponte]

Ugh. This happened to me. Very annoyed.

Annoyed that I'm going to have to start fresh with a different program because TurboTax can't figure out how to fix this. 

[Jimmyb820]

I used H&R online this year and they got it correctly so I’m going to start using them from now on.

[gyaponte]

Thanks for letting me know!

[AmyC]

The 414(h) or IRC 125 is reported on your W2 in box 14 under Other. When entering the W2, you must enter that income and will be asked to select the dropdown box that matches. The program then knows to carry that to your NY return to be added into income. It is not included in your federal income.

You can look at your NY tax returns for the years in question and see if your Box 14 amount for 414(h) was included in your NY taxable income.

For this year, it is line 21 under New York Additions labelled Public employee 414(h) retirement contributions.

If you review your returns and do not see the addition of the income, you would be liable for any additional tax.

@gyaponte

@Jimmyb820

[gyaponte]

​There is no dropdown box for  box 14​. I don't think you read our complaints carefully. We obviously looked at our "NY tax returns for the years in question and see if your Box 14 amount for 414(h) was included in your NY taxable income" The state also looked and saw that it wasn't included. That is why we all got letters from the state. So contrary to what you believe, the program does not know to carry that to our NY return to be added into income.... @AmyC 

[rjs]

@gyaponte  The dropdown is on the screen where you enter your W-2. It's the third column in the Box 14 section, with the heading "Tax Category." For a 414(h) select "NY IRC 414(h) Subject to NY tax." You have to select the correct category when you enter your W-2.

[Femow]

I just got off the phone with the ny state tax that I didn’t enter my 414h info and I Did , it never transferred to the state for years 2016-present and now I have a warrant on my house. I am gonna have this investigated

[jennesy]

The same thing happened to me - I got a notice from NY State that my IRC125 contributions from 2019 (I'm on NY State payroll) were not entered into my NYS taxable income. Fortunately the amount due (penalties and tax owed) is manageable, but I don't understand how this continues to be a persistent problem with Turbo Tax! This is not the first time that this has happened to me.

[Allison17]

I just found this problem and I'm so confused as to (1) why it wouldn't transfer from federal to state, and (2) how the response is, you should have checked. I use this service precisely bc this isn't a process that makes sense to me ever, no matter how much I check. If I thought it was going to be up to me, I'd just do it myself.

[jennesy]

Absolutely! Has anyone successfully had help from Turbotax on this issue? This is why I pay for the service and pay extra for my state return to be filed. If they can't do this simple thing what am I paying for? I spoke with someone on the phone about this, she kept me on hold, "transferred" me, then the call got disconnected. Later that day I got a message saying that my case had been closed. Still no resolution!

[Allison17]

Hold the phone on that one. I just got notified my 2019 return didn't include 414(h) and that year I used H&R Block. Every other year I filed with them was correct. And when I did TurboTax in 2020 it was correct, but this year, I just realized it was not.