Iowa pension exclusion?

emugge — Sat, 01 Jun 2019 23:50:11 GMT

turbotax seems to be taking the Iowa pension exclusion twice - both on Line 21 of IA1040 & also by reducing the Taxable Pension on Line 9 by the exclusion. Also, turbotax seems to be using the "Federal Taxable Amount" from 1099-R Box 2a instead of the "State taxable amount" from Box 14. Is this correct?

1) Yes, the amount That the IA tax return uses is the tot...

SteamTrain — Sat, 01 Jun 2019 23:50:12 GMT

1) Yes, the amount That the IA tax return uses is the total amount in all box 2a's of all the forms 1099-R that you entered in the Federal section. (Or the federally taxable amount of box 1 if box 2a is empty). ....(and an exception in #3 below)

Box 14 is not normally used... it should normally be empty...except that an Iowa public pension system retirement, IPERS does use it : Example at: https://www.ipers.org/sites/default/files/media/1099R_explanation.pdf (will deal with that later.)

2) Now, just entering your 1099-R's in the Federal section should put the total of all 1099-R box 2a's into line 9 of the IA-1040. (exception follows in #3), and up-to $6000/spouse on line 21 (each spouse must have at least one 1099-R and be age 55 or older by the end of 2018.) So line 9 should not be reduced by the line 21 pension exclusion $$...unless an error was made in your entries...or by a strange coincidence involving #3 below.

...and the exclusion cannot exceed the total 1099-R $$ distributed to each spouse...so if one spouse only took $4000 from an IRA, and had no other 1099-R $$, then they would only get a $4000 exclusion...for that individual.

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3) Line 9 can be lower than the total of all form 1099-R box 2a's ....if any of the 1099-R forms was from a Military Retirement, or from a IOWA Govt pension (IPERS). But that is handled during the IA interview about "Adjustments"....as follows:

3a) IF you answered Yes to the question about retiring after 1994, and YES the the question about you being a military Retiree.....or a retired IA govt employee (IPERS) after Dec of 1994).

then you are presented with a box to indicate the portion of the Military, or IPERS $$ that is NOT IA taxable.

3b) for a military retiree...it is all of box 2a of that DFAS 1099-R...and that $$ amount gets removed from line 9 of the IA 1040.

3c) for an IPERS retiree, it is the difference of box 2a and box 14 of the IPERS 1099-R form. SO if box 2a is 24,000, and box 14 is 20,000 , then you would put $4,000 in that entry field, and it reduces line 9 of the form 1040 by $4,000

3d) and if anything remains on line 9 of the IA 1040, then up-to 6000 from line 21 still applies to be removed

So if you are in this #3 situation, you do have to be careful about how you use this adjustment during the IA interview....in the IA "Adjustments" section

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So a reduction of 6,000 in line 9 of the IA 1040 and line 21...is just remotely possible..if in step 3c the difference between box 14 and 2a of the 1099-R just happens to b the same $6000 (for a single person)...or if military 1099-R box 2a, just happens to be $6000

topic 1) Yes, the amount That the IA tax return uses is the tot... in Retirement tax questions

Iowa pension exclusion?

1) Yes, the amount That the IA tax return uses is the tot...