Turbotax encountered a NYS problem with entries I made from my 2020 Form 1099-R

[ty0ung]

The 1099-R is from a local government-funded pension, part of which may be excluded from taxible.

[ReneeM7122]

When entering your Form 1099-R for your New York State pension,  you want to make sure that Turbo Tax isn't handling it as taxable income. 

To get the New York state pension deduction, 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 exempt 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 for the deduction.

[SergSam]

I had covid distribution from 401k in 2020 and everything is good on federal return (no 10% penalty fee, and spread of the taxes on 3 years). However on NY state return there's an issue with that and there is no way to fix it. From my conversation with support I was recommended to follow this solution. The problem is I don't see option 'New York State Employees ' on 'Where is your distribution from?' screen. Here is what I see:

Select the source of this distribution and enter any other New York information. Learn more

Retirement distributions from:

• US Government (including military)
• New York State and City Education
• Certain public authorities
• NYC Variable Supplemental Funds (VSF)
• Certain annuity funds
• Other Pensions of New York State and Local Governments

Retirement distributions from:

• New York State and City Education (optional retirement program)
• IRA rolled over from a former government pension

Not eligible for exclusion for those over age 59 1/2

None of the above (select for deferred compensation 457 plans)

[DMarkM1]

The bottom bullet in the top option "Other Pensions of New York State and Local Governments" is the catch all for NY State employee pensions. 

See page 12 in this NY publication for list of eligible pensions.

[Szabunka925]

If i took out a small withdrawl from my 401k due to loss if some hours at work due to covid, do I still pick the option "Not eligible for exclusion for those over age 59 1/2"  and the 8915E form will cover the 10% penalty?

[WendyN2]

Retirement savers were allowed to withdraw, for Covid-related reasons, up to $100,000 from qualified accounts without paying the usual 10% early-withdrawal penalty if they were under age 59½.

While you can spread the income across three years, you need to account for at least one-third of the taxes due on your 2020 return.

You also may need to take extra steps to ensure the withdrawal is qualified, if the tax form you receive doesn’t reflect that

You should receive a Form 1099-R that shows the amount you withdrew from your eligible retirement account. Remember, the IRS receives a copy, as well.

On the form, there should be a distribution code in Box 7. If the code listed is “2,” it signifies that the amount you received in 2020 from your plan was for a qualified reason under the Cares Act.

If there is a “1” in the code box, however, you’ll need to fill out a Form 8915-E to certify that your distribution should qualify under the CARES Act.