Why is Turbo Tax is not showing Utah Military Retirement Pay Tax Credit?

[catherineknaus]

This problem was identified last year

[MayaD]

You may qualify for this credit if you or your spouse (if filing jointly) received taxable military retirement pay. It does not include Social Security income, 401(k) or IRA distributions, or other sources of income, such as non-military federal retirement. 

Also, you may not claim this credit if you or your spouse (if filing jointly) claim the Retirement Credit (code 18).

[catherineknaus]

I know Utah has a tax credit on my military retirement pay.  Its that Turbo Tax program is not calculating this tax credit...its your program that is not working. You had this same issue last tax season and you did a temporary fix on it but now it is gone yet the program isn't updated. Will I have to wait months again for you to fix your program again???? If so, I will head to H&R Block to get them done correctly.  

[DaveF1006 · Accepted solution]

It depends. It may be there but disguised. Instead of reducing your Utah AGI, Utah gives a tax credit for military retirement income and it is calculated on form TC-40A. The credit is listed in part 3 of  form TC-40A and is labeled AJ.  This is the code for military retirement. 

The credit is calculated and then transfers to line 24 of TC-40. This is a non-refundable credit.  Let me explain how that works.

1. Utah accounts for all AGI including military retirement pensions.  Based on total income, a tax liability amount is assessed in Form TC-40
2. Then credits such as military retirement pension credit is applied reducing the tax liability to zero or close to it. Once the tax liability is zero, then no more credit is applied. This is a non-refundable credit.
3. I worked this out in a mock return and the credit is applied correctly in the Utah return.

[catherineknaus]

Thanks for the info...I finally figured out what I did wrong.  My fault!!