What do I do if Turbo Tax appears to have an error? I am a Maryland resident and receive a pension, but TT is not giving me the pension exclusion subtraction?

[MarilynG1 · Accepted solution]

If you are over 65, you may be eligible to exclude up to 31K of pension income on your Maryland return.

Check your Maryland Form 502, Line 10a for the Exclusion.

If you qualify, pay close attention to the follow-up questions in the Maryland state interview, and after entering your 1099-R in your Federal return.

You could also try deleting the 1099-R entry in your Federal return and re-entering it to see if this resolves your issue. 

The amount of Social Security income you receive is also a factor in calculating your exclusion. 

Click this link for more info from the Maryland Pension Exclusion.

[landerslp]

Mine does the pension exclusion, but I was not 65 on last day of December but Jan 1.  Turbo Tax included it. For Medicare I was eligible Dec 1 because of Jan 1 birthdate. Could this be why? Or do I need to do a manual override.

[AmyC]

@landerslp I have searched. I thought it would be simple but I found this:

Maryland Pension Exclusion - Comptroller of Maryland says 65 by the last day of the year. 

When I was expecting MD to follow the the IRS using Jan 1  Publication 554 - Internal Revenue Service

 your 65th birthday is on or before January 1 of the following year

You may want to Contact   MD for verification before losing that subtraction. Maybe the publication is too short to offer more details.

[landerslp]

Maryland said I did have to override TurboTax, due to difference in state and federal guidance. thanks

[mjones8928]

I meet all the qualifications to receive the exclusion and have received in the past using Turbotax. The suggestions provided do not work. What can I do without doing my state taxes manually? Can I get my money back?

[GeorgeM777]

According to the Comptroller of MD website, for calendar year 2021, the maximum pension exclusion is $34,300.  This subtraction applies only if:

1. You were 65 or older or totally disabled, or your spouse was totally disabled, on the last day of the tax year; and
2. You included on your federal return income received as a pension, annuity or endowment from an "employee retirement system." Please note that these include qualified defined benefit and defined contribution pension plans, 401(a) plans, 401(k) plans, 403(b) plans, and 457(b) plans.
3. A traditional IRA, a Roth IRA, a simplified employee plan (SEP), a Keogh Plan or an ineligible deferred compensation plan does not qualify.

If you satisfy the above conditions, have you completed your entire MD return in TurboTax?  In other words, have you gone through all the pages and entered all your income.  TurboTax will not likely calculate your exclusion until you have completed the income section in full.  Additionally, if your total Social Security and/or Railroad Retirement income is greater than the Maximum Pension Exclusion amount of $ 34,300, the pension exclusion will be zero (0).

@mjones8928

[mjones8928]

I have completed both the Federal Maryland tax forms. Social security is $22,000. Subtracting that amount from $34,300 leaves $12,300 which should be my exclusion.

I'm 81 years old and my pension is from an employee retirement system.

[AmyC]

No, the actual form shows social security subtracted from the $34,300 and then the lesser of that amount or your pension for the exclusion.  The updated 2021 Maryland Pension Exclusion has more information along with a 2020 link to the worksheet, Pension Exclusion Computation Worksheet