topic NYS IT201 non-qualified annuity got included in Pension and annuity income exclusion calculation in State tax filing

NYS IT201 non-qualified annuity got included in Pension and annuity income exclusion calculation

cl113730 — Sat, 03 Apr 2021 14:23:32 GMT

I sold a non-qualified annuity with New York Life and received a 1099-R. It was originally purchased with after tax dollars.

On NYS IT201 form, line 29 for Pension and annuity income exclusion, software is including the non-qualified annuity in the income exclusion, capping at 20,000.

I was always under the impression that only qualified retirement and pension related can be used in this income exclusion, so non-qualified annuity would not be included in this line?

if assumption is correct then there is a software defect in this area or perhaps there is a special way to 1099-R for non-qualified annuity that I'm not aware of.

Appreciate any feedbacks and clarification.

Thank you.

Re: NYS IT201 non-qualified annuity got included in Pension and annuity income exclusion calculation

LenaH — Sat, 03 Apr 2021 22:23:59 GMT

Yes, you are correct. Distributions received as a result of an annuity contract purchased with your own funds from an insurance company or other financial institution are not qualified. The payments are attributable to premium payments made by you, from your own funds, and are not attributable to personal services performed. These types of 1099-R distributions are not qualified for the exclusion of $20,000.

Please follow the instructions below to remove the exclusion from your state return:

Open your return.
Search 1099-R with the magnifying glass tool.
Select the Jump to link at the top of the search results.
Edit your 1099-R.
Continue past the information entered.
On the page titled, What kind of retirement plan do you have?, select Non-qualified plan. This includes Includes life insurance policies, private or purchased commercial annuities, and military retirement plans.
Your exclusion will be removed from your NYS return.

Publication 36 - General Information for Senior Citizens and Retired Persons

Re: NYS IT201 non-qualified annuity got included in Pension and annuity income exclusion calculation

Traveltrish — Tue, 14 Feb 2023 19:50:12 GMT

I have the same situation but do not get the screen mentioned in the answer. It appears that the only way the $20,000 pension exclusion is not triggered is if I check the line "not eligible for exclusion for those over age 591/2 and that generates an incorrect Form 5329.

Help!!

Re: NYS IT201 non-qualified annuity got included in Pension and annuity income exclusion calculation

AbrahamT — Tue, 14 Feb 2023 20:02:30 GMT

What you would have to do in this situation would be to edit entries in both your federal and state input. Follow these instructions See HERE