Michigan qualified public safety pension

[bulldog00111]

There is still a problem with the Michigan Tax.  I have a qualified pension but it is still taxing my Michigan pension.

[JohnW152]

Make sure that you've correctly input your pension exclusion type.  To do this in TurboTax Online: 

1. Open TurboTax Online
2. Select  Tax Home in the left pane
3. On the  Hi, let's keep working on your taxes! screen, select the dropdown on the right side of the State Taxes box, then select Start, Continue, or Review/Edit
4. In the left pane, select Prepare State
5. Proceed through the screens until you come to the Status of your state returns screen
6. Select  Start, Continue or Edit to the right of Michigan.  If no state is shown, select + Add another state to add Michigan
7. Proceed through the state screens until you get to the Here's the income that Michigan handles differently screen.      Select Start or Revisit to the right of Retirement Income and Pension Deduction
8. Pay attention on the Retirement Income and Pension Summary screen.  It looks like this:

You can see, under TYPE, what code you entered when you input your retirement income.

Then, below that, you can see a guide showing what each retirement type is, and what type of exclusion it qualifies for.

If the code for the retirement income you've entered doesn't match the exclusion that you're entitled to, select Edit next to the relevant income source and make any adjustments necessary.

[bulldog00111]

Right but it is still not correct.  For Michigan Public Safety age is not a factor.

[bulldog00111]

Michigan Public Act 4 made it so retired Police Fire etc collecting a qualified pension, age doesn't matter to not pay State taxes.  It still will not let me.  If I change my DOB it provides the Tiers for pensions.  If anyone has any fix.  please respond.  Thank You

[LindaS5247]

When you entered your Form 1099-R into TurboTax, there were a couple of questions that came up after entering your form that you needed to answer in order for your retirement income to be exempt from Michigan income tax.

Per the screenshots below, you need to answer these questions in order for your retirement income to properly flow to your Michigan state return and to be exempt from tax.

[bulldog00111]

DOing that but it is still taxing my pension,   Also not showing any of the other questions

[dangrmi]

I am having the same problem. I have triple checked all the entries recommended and they are all correct. I have also entered a zero for the entry of Michigan Distribution Amount as it appears on my 1099-R but Turbo Tax continues to tax it for Michigan. This was a new for Michigan in 2023. Please correct the problem in TT. 

[MarilynG1]

Public Act (PA) 4 of 2023, also known as the Lowering MI Costs Plan, takes effect Feb. 13, 2024.

PA 4 of 2023 amends the Income Tax Act of 1967 to allow all retired members of the Michigan State Police Retirement System (SPRS) who receive a pension to be exempt from state income tax beginning with the 2023 tax year.

 Michigan’s 2023 tax return, forms, and instructions (e-file and paper format) incorporate all retirement and pension benefit subtraction options – including those created in the new law. Retirees who filed their taxes prior to the law’s effective date need not file an amended return. The Michigan Department of Treasury will work impacted returns as they are received and prepare them for release after the law’s effective date. For more details, see the Michigan Department of Treasury website.

If TurboTax has not yet incorporated the new law in Michigan, you can either file now and Amend your return later, or wait until the change is made.

However, it sounds like Michigan will track/update those returns that are affected.  

Here's more info at ORS State Police Retirement. 

[bulldog00111]

Don’t know if this will help since can’t get answers from TT  Last time going to use TT. So I uninstalled and reinstalled the program.  After doing this I changed my DOB to 1950.  I opened up the forms and was able to manually put info in form 4884. You have to edit and override each entry. After doing this I changed it back from the forms went back to edit my 1099 r. I was finally able to input the information. I went back and changed my DOB. All seems to work now. Good luck. Don’t know if I had to do all that but nothing else was working 

[loleary1]

I am having the same issue.  I think I will wait a week or so and see if turbotax corrects this.  Thanks for explaining your fix, I will do the same as a last resort.  So frustrating!

[bulldog00111]

Also, when you’re doing it go back to the state return.  If successful you’ll see the follow up questions when you go and edit the 1099R

[pso3315]

I'm having the same issue.  I've got the latest update as of 2/19/2024, I've answered the Public Safety Officer question and accurately entered my 1099-R info.  It is not recognizing that my State Withholding should be refunded.

[bulldog00111]

Try changing DOB   To 1950. Go back to your state return and income. Edit 1099-r. See if that pulls up the follow up questions. If not go to forms. In left column go down to form 4884. You will have to input things manually and before each entry you will have to go up top edit and override.  Don’t save anything until it’s correct. This way it goes back to original. If any of these work make sure you change your DOB back. It’s BS that you have to do it this way. Good luck

[dangrmi]

It was well known for the past several months that this change was happening. Why hasn't Turbo Tax done anything to fix it? They don't even warn filers that there is a problem so if you aren't aware of this tax law change then you are missing out on a huge reduction in your Michigan tax liability. If they can't get this right what else is wrong with the program? I guess it's time to move on from TT. 

[ckooyer]

There must be glitch in the interview process reverting back to unchecked in the yes/no question under the federal where it asks you if the pension is from public safety.

I solved the problem when in the Michigan section of TT by leaving easy step, opening the MI 4884 form, picking the quick view of the pension work sheet, and THERE making sure the public safety box is marked. It then computed the proper credit of MI taxes paid on my pension.