Why doesn't turbotax subtract my Iowa Retirement Income?

[dlvandus2025-gma]

I enter my IRA Distributions and Pension income to be excluded from my income in the Iowa step-by-step.  It does not show up in IA Schedule 1.  This appears to be an error in TurboTax that should be corrected.  How should I handle.

[BillM223]

Hmmn, it is excluded in my test return.

What are you using, TurboTax Online or desktop?

The State of Iowa says, 

To qualify for the retirement income exclusion, the taxpayer must be:

1. 55 years of age or older on December 31 of the tax year, or
2. Disabled, or
3. A surviving spouse or a survivor having an insurable interest in an individual who has qualified for the exclusion in the tax year on the basis of age or disability. A survivor other than the surviving spouse is considered to have an “insurable interest” if the survivor is a son, daughter, mother, or father of the annuitant or pensioner.

For married couples, the retirement income exclusion is only applicable to a spouse who meets one of the above conditions. If one spouse does not meet one of the above conditions, retirement income attributable to that spouse is not eligible for the exclusion. If both spouses meet one of the above conditions, the taxpayers may exclude all eligible retirement income.

Do you meet these qualifications?

[dlvandus2025-gma]

My wife and I are both over 70 years old.  So the exclusion should apply.

I am using TurboTax Deluxe, Windows Desktop.

In the Iowa step-by-step interview, it posts an amount reported on federal for my IRA distributions.  Then it asks for the amount to be excluded from Iowa.  It is the total amount.  So zero is reportable to Iowa.

Likewise for my pension amount.

If I then look at Iowa 1040 schedule 1, line 7, "IRA/Pension/Railroad Retirement Income", it is still zero.  So it doesn't get subtracted from my Federal reported income.

It appears to me that it is not linking the excluded amount into the Schedule 1 line 7.

[StageDir]

I have the same issue with my 401k.

[BillM223]

"Then it asks for the amount to be excluded from Iowa. " Actually, no it doesn't.

The Iowa interview screen says, "IRA distributions NOT reportable to Iowa". The IRA distributions are to be "excluded" from Iowa income, not "not reportable". These are different terms in taxation.

To me, this phrase is alluding to the fact that IRA distributions cannot be excluded unless they were taxable on the federal return.

In the normal case, you would enter your IRA amount that is taxable on the federal return, therefore would be taxable in Iowa except for the exclusion. 

However. I agree that this phrasing is not obvious. I will ask that this interview screen be reviewed. 

[BillM223]

@dlvandus2025-gma 

Part of the process of documenting an issue to be addressed is to get a "sanitized" tax return of the user reporting the issue. "Sanitized" means that any personally identifiable information has been removed from the return so that we have no idea who you are.

You do not have to do the sanitizing; instead, TurboTax will do it for you when ask for a "token". The token is a 7-digit number that points to the sanitized version of the tax return in our data base. So you follow the simple directions below, then post the number of the token in this thread.

How to get a token:

Online

• Log into your TurboTax Online tax return
• On the left, click on Tax Tools
• Under Tax Tools, click on Tools
• In Tools Center, click on Share my File with Agent
• TurboTax will give you a “token”, a 7-digit number
• Post the token number in this thread
• Be sure to add to that post “@” “billm223” (without the space in between) so that I will be notified

Desktop (Windows)

• Open your return in the desktop product
• Look along the top and click on Online
• Click on Send Tax File to Agent
• TurboTax will give you a “token”, a 7-digit number
• Post the token number in this thread
• Be sure to add to that post “@” “billm223” (without the space in between) so that I will be notified

Desktop (Mac)

• Open your return in the desktop product
• Look along the top and click on Help
• Click on Send Tax File to Agent
• TurboTax will give you a “token”, a 7-digit number
• Post the token number in this thread
• Be sure to add to that post “@” “billm223” (without the space in between) so that I will be notified

Thanks!