topic 1099-R EXEMPT in Retirement tax questions

1099-R EXEMPT

actieve — Sun, 02 Feb 2025 13:32:36 GMT

This seems like a long time bug in TurboTax, in a tax exempt state like NY on Pension over the retirement age, it still taxes the income on the state return. You cannot type EXEMPT in 14 which we have seen on multiple other threads, and if you enter $0 taxable income into the calculation form it removes the federal tax on the income as well as the state tax. I see multiple posts about this over the years and no real solution.

Re: 1099-R EXEMPT

LenaH — Mon, 10 Feb 2025 13:54:33 GMT

Your pension is only fully exempt by New York State when it is paid by:

If you received your pension from one of these sources, then you must indicate so after you input your 1099-R. Please input your 1099-R as shown on the form and don't type Exempt in any of the fields or change any of the data. Enter the 1099-R as it appears on your form.

To exempt your pension, please follow the instructions below:

Open your return.
Navigate to the 1099-R section
- TurboTax Online/Mobile: Go to 1099-R
- TurboTax Desktop: Select Search Topics. Search for and select 1099-R
Edit your 1099-R.
Continue until you reach the screen, Where is this distribution from? Select the source of the distribution. Click Continue.
Open your New York return.
On the page, You Just Finished Your New York Return, click Update next to Adjustments to federal income.
On the page, Changes to Federal Income, click Start next to Received retirement income.
Click Done and then continue through the screens.
On the page, Pension Deduction Summary, you should see the full amount of your pension being deducted. Please see screenshots below for additional guidance.

Note: If your pension is taxable and you are over the age of 59 1/2, you may still qualify for an exclusion up to $20,000.

Re: 1099-R EXEMPT

SteamTrain — Mon, 10 Feb 2025 14:32:33 GMT

i.e. Do NOT make the NY distribution amount a zero.

The software uses that NY distribution amount, and the bullet points selected above it, top determine how much to remove from NY income. If you change it to a zero, then zero is subtracted.

The software probably transfers the correct amount into that box, but if it doesn't, you'd put in the value of box 2a, as long as it is not a zero....or if box 2a is empty or marked "undetermined", then it would be whatever amount of box 1 was included in the Federal income (many times, that's just the box 1value)