Missouri Tax Filing - Railroad Retirement Exemption

[MO Taxpayer]

TurboTax is not including my full Tier 1 and Tier II Railroad Retirement benefit exemption in MO form MO-A.

Per the MO form, all Tier I and Tier II are exempt from Missouri tax.

I calculated an exemption of $52,421 and per TurboTax the amount is $44,982.

[MO Taxpayer]

Can someone at TurboTax please advise how the calculation on the MO-A, line 11d calculation is made?

[BillM223]

I assume that you mean the line 11 in Part I of the MO-A?

What is the total amount of your Tier 1 and Tier II Railroad Retirement benefit? And what is the taxable amount of your Tier 1 and Tier II Railroad Retirement benefit?

[MO Taxpayer]

Yes, that is correct.

I am trying to determine the exemption amount for my husband's Railroad Retirement Benefit.

[BillM223]

I understand that. What is the total amount of your Tier 1 and Tier II Railroad Retirement benefit? And what is the taxable amount of your Tier 1 and Tier II Railroad Retirement benefit?

[MO Taxpayer]

That is what I am having a hard time determining.

The taxable amount of the Tier 1 benefit is $20,859, but I'm unable to determine the taxable amount of Tier II as the calculation shown on line 5b of the Federal 1040 includes a pension which is not tax exempt in Missouri.

I appreciate your thoughts.

[BillM223]

"but I'm unable to determine the taxable amount of Tier II as the calculation shown on line 5b"

Take the line 5b amount, and subtract the Tier I taxable amount (20,859) and the amount of the other pension - this should give you the amount of the Tier II taxable amount. This is true unless you had basis in that other pension (after tax contributions). 

[MO Taxpayer]

The taxable portion of Tier 1 is shown on line 6b of the 1040 as it is treated the same as social security.

However, I was able to calculate the taxable portion of Tier 2 by using your theory (the other pension had a -0- basis).  I am happy to report that Turbotax did indeed calculate this correctly!

Thanks for helping me think this through and understanding the calculation.