Maine State Employees Retirement System Pickup

[BillT4]

When a retired state worker receives their pension in Maine a portion of the taxable amount shown in box 2a on the 1099-R is reduced by subtracting the box 16 State Distribution amount.  The difference between box 2a and 16 is called the Pickup and reduces the taxable pension for state purposes only.  

Instructions in Turbo tax appear to say the calculation is box 2a - box 14 (state tax withheld).  This will produce a significant reduction in the taxable income for the state return for most recipients.  I think this is wrong in Turbo tax.

Am I looking at this correctly?

[SteamTrain]

Yes...someone else picked up on that yesterday.  The TTX text is wrong and is using last year's box number information in the text...make sure that the value used is from box 16.

The IRS changed the box numbers from 2019's  boxes #12,13,14, and changed them to 14,15,16 for 2020.

_______________________________________

@macuser_22   any chance you can get the Moderators to check this text error out and get it corrected   (at least I hope it's just a text/instruction error)?   None of us uses the Maine software, so someone would need that to see where it occurs, and make sure that box 16 is the value to be used 

oh damn...16 might be empty on some 1099-Rs...but since it applies to former ME employees, perhaps their retirement system 1099-R forms fill in box 16.

@BillT4   On your actual paper/PDF ME State Employees Retirement System 1099-R, is box 16 filled in with a $$ value?

[BillT4 · Accepted solution]

I am actually doing a return for a friend who was a state employee.  Box 16 on the 1099 has a value in it that makes sense.  The Pickup represents the employee's contribution to the pension that was made years ago and was taxed back then.  Thanks for your response.  

[J138]

TT instructions are based on last year's 1099R boxes. Instructions for 2020 should be to subtract Box 16 from Box 2a.