topic OK, I just went through the same process with my program... in Retirement tax questions

Military retirement and Illinois taxes

jdbaughtax — Mon, 03 Jun 2019 20:23:56 GMT

Hello,
Im doing my state tax return. My husband is retired military and we know Illinois does not tax it. However, turbo tax is showing we owe . Any suggestions on what I did wrong, or how to correct this?

Have you completed, including the "Review", the IL state...

ToddL — Mon, 03 Jun 2019 20:23:57 GMT

Have you completed, including the "Review", the IL state tax interview in TurboTax?

no, unfortunately, no one could figure out why Illinois t...

jdbaughtax — Mon, 03 Jun 2019 20:23:58 GMT

no, unfortunately, no one could figure out why Illinois turbo tax was charging me taxes, when Illinois does not tax military retirement--even though the federal turbo tax acknowledged that. I will have to do my state taxes myself.

You would have to complete the IL state tax interview in...

ToddL — Mon, 03 Jun 2019 20:24:00 GMT

You would have to complete the IL state tax interview in TurboTax before the program adjusts your IL tax to account for the military retired pay exemption.

Until you do that, the program treats all your federal income as taxable in IL.

Specifically, there are questions in the IL state tax interview that will identify the military pay and adjust/eliminate your IL tax on the military retired pay.

thanks for your input--but I have completed the state int...

jdbaughtax — Mon, 03 Jun 2019 20:24:02 GMT

thanks for your input--but I have completed the state interview, it has taken me to the filing section, and it still shows we owe money to Illinois. Any suggestions, or am I not understanding?

Did you have any other IL income?

ToddL — Mon, 03 Jun 2019 20:24:03 GMT

Did you have any other IL income?

no just his retirement/disability as listed on his 1099 R

jdbaughtax — Mon, 03 Jun 2019 20:24:04 GMT

no just his retirement/disability as listed on his 1099 R

wait a minute, its now having me do an IL worksheet. If...

jdbaughtax — Mon, 03 Jun 2019 20:24:05 GMT

wait a minute, its now having me do an IL worksheet. If this doesnt fix it I will let you know. thanks for your help

nope, still showing us owing money.

jdbaughtax — Mon, 03 Jun 2019 20:24:07 GMT

nope, still showing us owing money.

OK, I just went through the same process with my program...

ToddL — Mon, 03 Jun 2019 20:24:09 GMT

OK, I just went through the same process with my program and it did remove the Military Retired Pay from IL taxable income. I was careful to enter the correct DFAS 1099-R info, especially the DFAS EIN (I'm retired military). I'll post the screenshots and hope that helps. (The additional $5K is from another pension distribution)

thank you. i will look at your screenshots as soon as I...

jdbaughtax — Mon, 03 Jun 2019 20:24:10 GMT

thank you. i will look at your screenshots as soon as I get them. Somehow, something is not right. Probably me lol. I dont recall the state asking me about my 1099-R; it asked about income but not that kind. Ill double check.

Actually, the state does not ask about the 1099-Rs, excep...

ToddL — Mon, 03 Jun 2019 20:24:12 GMT

Actually, the state does not ask about the 1099-Rs, except for you to verify/edit the numbers. It transfers directly from the Federal entry of the 1099-R. Make sure you have the correct FEIN for DFAS (you can use the one I entered - it is the same as yours)

im trying to get back to state so I can edit. having tro...

jdbaughtax — Mon, 03 Jun 2019 20:24:14 GMT

im trying to get back to state so I can edit. having trouble getting there. sorry.

I just found the place to edit. I think I can fix this f...

jdbaughtax — Mon, 03 Jun 2019 20:24:15 GMT

I just found the place to edit. I think I can fix this from here. If not, you'll be hearing from me again! But I really appreciate your help; the screenshot of yours showed me exactly where I need to look. I appreciate it.

You have been very helpful, and thank you for that. I do...

jdbaughtax — Mon, 03 Jun 2019 20:24:16 GMT

You have been very helpful, and thank you for that. I do have one more question about federal returns. My husband has power of attorney for his uncle, and handles his investments. He is listed jointly on one managed portfolio mutual funds, non IRA. He does not receive any income for this; it is strictly his uncle. Is my husband required to declare it on our tax return? His uncle will declare it on his own return.

The fund income is only reported under one of the joint...

ToddL — Mon, 03 Jun 2019 20:24:18 GMT

The fund income is only reported under one of the joint holders' SSNs. As long as his uncle's SSN is the one used, you don't report it on your return.

that's what I thought. thanks

jdbaughtax — Mon, 03 Jun 2019 20:24:19 GMT

that's what I thought. thanks

For 2021 Illinois return Turbotax does not exempt military pension.

Tom6972 — Fri, 04 Feb 2022 23:13:32 GMT

In prior years, military retirement pensions have been included with IRA, SSA, and other pensions in being exempted from Illinois taxable income. As of February 4, 2022, the military pension is not being exempted.

Illinois 1040 guidance says it should be.

Please investigate,