The NYC Employees Retirement System (NYCERS) is not in the list of tax exempt 1099-R sources. It is NYS taxable in TurboTax when it is state tax exempt. How to fix?

You should select the New York State and Local Retirement System option when entering your Form 1099-R.  If you select the see examples list, you will find Employees Retirement System (ERS) as an example (see screenshot).  This should then make the distribution an NY state subtraction on your NY return.

Thank you! That worked. Please suggest to the development team that clarifying language or a note like - ... "this option includes  Local Government pensions from many counties, cities, towns and villages" - would make this much more readily apparent. In 30 years of NYC service, I never saw the term NYSLRS even though it turns out the NYC Retirement system is part of it.

So, what do I do now?

NYS TurboTax 2020 will NOT exempt the amount received from NYSLRS.  I've tried to enter the amount several times and still wants to exempt $20K and tax the difference.  I have check box identifying NYS & Local Retirement System several times and amount entered does not show on line 26 in the NYS form IT-201.  Needs fixing ASAP!!!

This is handled in the New York (NY) State portion of the tax return interview. 

1. When you reach the Changes to Federal Income screen >: Scroll to Wages and Retirement Adjustments
2. Select Received retirement income > Start
3. Answer the questions on each screen
4. On the screen titled Governmental Pension Exclusion enter the taxable amount to exclude for the NY return
5. The next screen will show you the Pension Deduction Summary
6. See the image below for assistance.

Check the box for US government pensions and the pension subtraction will be correct.