I'm a federal retiree. Hawaii N-11 form line 13 states: Pension taxed federally but not taxed by Hawaii. This entry will result with the portion of my annuity that represents my contribution (not Fed taxed) being taxed by Hawaii. My retirement contrib. was made with after tax money. Shouldn't the total annuity be non-taxable for Hawaii? Am I misinterpreting something or is the N-11 incorrect?
In Hawaii, none of your federal retirement is taxable. To make sure that this is properly entered in your HI return, after you enter your CSA-1099R in the Federal Section, make sure that you check that this is a government or military pension. See the screenshot below.
When you do that, your state return will show that your pension isn't taxable.
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