turbotax is NOT exempting TSP (Thrift Savings Plan) distributions for state (KS) taxable income purposes. It should be treated same as federal pension.

[fostermoon]

turbotax needs to generate KS Schedule S for proper reporting and exclusion of eligible federal pension income.

[MaryK4]

The amount you received as retirement benefits from the Kansas Public Employees Retirement System is not taxable on your Kansas return. The retirement benefits must be included in your federal adjusted gross income before it can be subtracted on your Kansas return. Retirement benefits taxed on your Federal return must be entered on Kansas Schedule S, Part A.

In the federal section of TurboTax, after you enter the 1099-R, you can indicate that it is a KPERS or other qualified KS public pension benefit so that it will be subtracted from the Kansas income.  

[fostermoon]

Thanks for the reply, however, this does not address our specific situation.

Both my spouse and are retired federal employees, not KPERS pensioners.

The following is directly from Kansas Department of Revenue's guidelines for deducting excludable income from Kansas taxable income on Schedule S:

"LINE A13: If you are receiving retirement benefits/pay, report on this line benefits exempt from Kansas income tax (do not include Social Security benefits). For example, KPERS retirement benefits are subject to federal income tax, but exempt from Kansas income tax. You must make a specific entry on Schedule S to report these exempt benefits. Enter total amount of benefits received from the following plans that was included in your federal AGI. Do not enclose copies of the 1099R forms, instead keep copies for your records for verification by the Department of Revenue at a later date.

• Federal Civil Service Retirement or Disability Fund payments and any other amounts received as retirement benefits from employment by the federal government or for service in the United States Armed Forces including Thrift Savings Plans."

The issue we have is that TurboTax is not recognizing the 1099-R income as federal retirement income, and therefore the Schedule S (for the KS state return) is not being generated to then exclude said income.

We did not have this issue last year.

[fostermoon]

And to be precise, that is exactly the button we marked when we entered on 1099-R income.

The result is that the Kansas return is "allowing" us the $60,000.00 state exemption on retirement income, not the option of excluding all of it on Schedule S.

[SteamTrain]

@fostermoon 

If that's the case, then you may have to call Customer Support and get an investigation started.

How do I contact TurboTax?

Unless @MaryK4 is willing to investigate and get a Diagnostic file to get things started.

[SusanY1]

The screenshot that MaryK4 posted above may not be clearly visible on your end, but it is where you indicate KPERS as well as federal retirment so that TurboTax knows how to treat it.  You select this as you go through the Kansas interview. 

Did you already select this and it still didn't exempt the income, or are you not seeing the screen to make this election?  TurboTax will not pick up on the source of the funds automatically, and this screen is what is used to designate the income as free from Kansas state tax. 

If you aren't seeing the screen at all to make the selection, try deleting the state return and adding it back to prompt the question to appear.  See: How do I delete my state return?

[fostermoon]

Thanks for the reply.

Yes,  we see that screen.  Yes, from the very beginning we selected the income as Federal Retirement. 

We have repeatedly reviewed all four 1099-Rs entered.  Two for federal pensions and two for TSP.  All four were selected as Federal Retirement income.

Per your advice, we deleted the KS state return.  Then we redid it, but with the same result.  The program is NOT picking up the income as Federal retirement that will prompt a Schedule S for the Kansas return.

Instead, it treats all of the four 1099-R income the same (as state taxable). 

[SusanY1]

I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:

TurboTax Online:

1. Sign into your online account.
2. Locate the Tax Tools on the left-hand side of the screen.
3. A drop-down will appear. Select Tools
4. On the pop-up screen, click on “Share my file with agent.”
5. This will generate a message that a diagnostic file gets sanitized and transmitted to us.
6. Please provide the Token Number that was generated in the response.

TurboTax Desktop/Download Versions:

1. Open your return.
2. Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent” *
3. This will generate a message that a diagnostic copy will be created.  Click on OK and the tax file will be sanitized and transmitted to us.
4. Please provide the Token Number (including the dash) that was generated in the response.

*(If using a MAC, go to the menu at the top of the screen, select Help, then, “Send Tax File to Agent”)

[Mimiks]

Has this issue been resolved?  I am having the same problem.

[BillM223]

fostermoon

What version of TurboTax are you using: Online or CD/desktop?

I did the following steps in the CD/download product.

1. Set my state of residence to Kansas in Personal Info.

2. Went to enter the 1099-R with the TSP distribution.

3. In the screens after the numbers are entered for the 1099-R, I see:

4. As you can see, I checked off "Federal retirement or disability benefits" for the $20,000 TSP distribution.

5. Then TurboTax created a Schedule S which listed the Social Security benefits that happened to already be on this return, and the $20,000 TSP distribution. 

6. This $28,500 total was placed on line 2 on the K-40 as a subtraction from income.

Now, tell us what you did that was different. It could be"(I was using the Online product", or "I did not see that screen about federal retirement to check in the 1099-R interview", or "The moon is full". No, seriously, this has worked for years, so we want to know what is different this time.

@fostermoon 

[fostermoon]

For some reason the 1099-R from OPM had the state on the form, but the 1099-R from TSP did not. Adding KS in the state field of the 1099-R from TSP resolved the problem.

[Mimiks]

I am using the online version.  I do not see the form referenced above.  I put in Kansas as the state and the ID number listed on the TSP form.  It will not exempt the payment.

[Mimiks]

I figured it out.  It was my other government 1099 that didn’t specify Kansas.