TurboTax is not set up to exempt law enforcement pensions in Michigan

[MarilynG1]

If you live in Michigan and received a 1099-R for a Law Enforcement Pension, on the page in your Federal return that asks, 'Was ... employed as a Public Safety Officer' choose Yes.

You will get a 3K Pension Exclusion on  your Federal return.

For Michigan:

'Public Act 4 of 2023 — Retirement State Tax Changes

Public Act (PA) 4 of 2023 will take effect on Feb. 13, 2024. PA 4 of 2023 amends the Income Tax Act of 1967 to allow all retired members of the Michigan State Police Retirement System (SPRS) who receive a pension to be exempt from state income tax beginning with the 2023 tax year.

Retirees who want to use the limits of the new law should file their 2023 tax return after the law’s effective date. If filing prior to the law’s effective date, an amended return can be filed after PA 4 of 2023 takes effect.'

As of now, there is no expected date for this change to be implemented in TurboTax.  You could file now and amend later.  You have up to three years to Amend a Return.

Here's more info on ORS - Michigan State Police Retirement System. 

[SheriffJohn]

The problem needs to be FIXED. Having a customer file an amended return later is NOT the answer.

Also, a qualified police or fire pension is fully taxable on your FEDERAL return. The exemption is for your MICHIGAN return.....

[LindaS5247]

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:

For 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 that was generated in the response

Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.

[StreetCop]

I am in the same situation.  I believe the actual statutory provisions list the effective date as 90 days after the last day of the prior year legislative session.  It was effective February 13th, 2024. 

Time for a turbo tax update.

[preconnect150]

Okay I spent a couple hours talking to a tax professional from TT, finally coming up with a solution.  Go to the bottom of schedule 1 worksheet.  There is a box that says retirement status worksheet. Under filer check box 3.

After checking that box go back to form 4884, you will now see a X in the box 6A that says: Check here if you received qualified retirement benefits earned from service by fire, police or county corrections officer.

Now you should see your numbers change in your Michigan State tax total.

Hope this helps, it worked for me

[StreetCop]

Yesterday (02/28/24) I was able to find a relatively simple work around for TT's failure to fully impliment this new law.  I called the TT help number and a really good guy named Steven from FL spent an hour with me as we tried various fixes. 

Apparently the pensinon exemption works just fine for older folks as the new law has a tiered aged based enactment for the other categories (teacher, etc).  So...

We changed my DOB to 1950.  The program then correctly recalculated to show the correct State return amount (about $2,100 higher in my case).  I then changed my DOB back to the correct year and the previous re-calculations remained.  Error checks worked and the return was submitted.

My return has been accepted by MI, lets see if the money comes..