Where can I find the Pension credit under the Maryland Retirement Tax Elimination Act of 2023?

[SabrinaD2]

You can find and claim the Pension Credit under the Maryland Retirement Tax Elimination Act of 2023 (Senate Bill 461) on your Maryland state tax return (Form 502U - Subtractions From Income) under the subtraction modifications section. Eligible individuals aged 65 or older, or those receiving Social Security benefits, can subtract up to $10,000 of taxable income for 2023, with the amount increasing annually.

To find the Pension Credit in TurboTax, follow these steps:

1. Sign in to TurboTax
2. Complete your Federal Return First
3. Be sure to enter correct state information under my information
4. When entering your 1099-R information enter exactly as on the form
5. After completing your federal return, scroll to the bottom and proceed to the Maryland state return section in TurboTax
6. TurboTax will automatically calculate the subtraction and apply it to your state return. 

[amy9017]

Sabrina,

Thank you for your response! A couple of notes:

1. The maximum was $10K in 2023. In 2024, it was doubled:

• "Bill Summary: The subtraction modification may not exceed:
  •  $10,000 for tax year 2023;
  •  $20,000 for tax year 2024;
  •  $30,000 for tax year 2025;
  •  $40,000 for tax year 2026; and
  •  $50,000 for tax year 2027."

2. My confusion (if I didn't misread something) stemmed from the pre-written help on the TurboTax page, which advised me that I could claim the credit through the state return dialog in TurboTax. Good to know that it is being done behind the scenes, but it would be better if this credit were actually listed with the others and pre-selected by the system upon completion of the federal return.

Thank you!

Amy

[SabrinaD2]

Here’s some additional on how to find the Pension Credit under the Maryland Retirement Tax Elimination Act of 2023:

Optional: Viewing the Steps Directly on the Form (Using TurboTax Desktop)

If you’d like to see or manually enter the details directly on the form, here’s how to use TurboTax Desktop (TTD):

1. Open TurboTax Desktop: Launch the TTD software on your computer.
2. Navigate to State Taxes: Go to the "State Taxes" section and select Maryland.
3. Switch to Forms Mode: Switch to "Forms Mode" to view and work directly on Form 502.
4. Enter Pension Exclusion: Enter your pension income details, and TTD will calculate the exclusion amount and automatically populate line 10a of Form 502.

Form 502 Line 10A

Let me know if additional information is needed.

[amy9017]

Thank you, Sabrina.

[amy9017 · Accepted solution]

Hi Sabrina -

I contacted the Maryland Comptroller's Office and discovered that this bill was not, in fact, passed.

The Maryland Pension EXCLUSION is law, and that is what you have referenced in your reply. It contains a provision for a SS offset so is only available to some and in some degree. The two are of course easily confused! But it appears the more significant Pension CREDIT did not make it through committee.

Thanks,

Amy