TurboTax is showing the 1099-R's on my Fed return (correct). NJ shows income as including pension dists but NY return also shows them. Is this correct? Not NY Resident.

[revo8778]

I am filing my taxes for 2023 following the death of two family members who left various retirement accounts and benefits to me. These included a pension death benefit, a 401k (which I paid out), and a Roth IRA (which I paid out). So three 1099-R's. I withheld 30% Federal on the first one and 30% Federal/10% State on the second. There was no withholding on the Roth as no taxes are expected (additions older than 5 years). I work in NY but live in NJ so I file in two states. My deceased relatives were both NY residents.

Currently TurboTax is showing the 1099-R's on my Fed return (correct) but things get weird on the state returns. NJ shows my taxable income as including the pension death benefit and the 401k distribution (seems correct) but the NY return also shows them (???). There are also pension/annuity income exclusions claimed in NY and the pension death benefit is categorized as "Pensions of NYS/local governments" but these seems inappropriate as I am not a resident there. My thinking is that the 1099-R's would only be reported on one return (NJ probably) and not the other. Am I wrong?

[AmyC]

The pension/annuity income exclusion is correct if government employee.  NY and  NJ may have a claim. The income is taxable to you as it would be to the holder. For example, you didn't hold the ROTH over 5 years, but someone did.

NY taxes NY sourced income. See Nonresidents: New York source income for the fine lines of taxable or not. You could have NY taxable income. Just like your wages, they would be included in the NY income taxed by NY to receive a NJ credit.

Regarding the pension exclusion: Information for retired persons - Tax.NY.gov states: If you received pension and annuity income as the beneficiary of a deceased officer or employee of the United States, New York State, or local government within New York State, you may also make this subtraction to the extent that the distributions are included in your federal adjusted gross income.

NYS & Local Retirement System states: NYSLRS pensions are not subject to New York State or local income tax, but if you move to another state, that state may tax your pension.