According to Form 1099-R, my "State Taxable Percentage" (box after #14) is 62.45%. How do we account for that on our KY State form?

[DanielV01 · Accepted solution]

That depends, but in most cases it won't be necessary to report at all.  This is because Kentucky excludes the first $41,110 of pension income regardless of the source.  If the pension amount is less than $41,110, nothing will come up about this in the KY return because it is all excluded.  If the pension is more than $41,110, then you will see screens that will ask questions about what type of pension it is (likely a government pension) and the percentage amount, etc.  TurboTax will calculate how much of the pension would still be taxable at that point.  This is all calculated on KY Schedule P.