Nontaxable Potion of the Pension Distribution in the State of Hawaii

[Ginseng]

I took out money from my employer 401K plan (employer and employee both contribute to the plan) from Covaid-19. Federal tax allow me to split the amount in 3 years to pay the taxes. Now comes to the State of Hawaii, On the page it said "Enter the nontaxable potion of the pension distribution I received, and there is a box to type in the "exclusion amount". I need to know do I have to pay Hawaii tax on the full amount on the distribution under Hawaii for taking out money on the 401K plan on Covaid-19 or it can be like the federal, can split into 3 years to pay the taxes? How do I figure out the amount to put in the box "exclusion amount"? 

[DavidD66 · Accepted solution]

You should enter $0 as the "exclusion amount", as the entire withdrawal is taxable, even though it allocated over three years.  

Hawaii calculates taxable income by starting with federal Adjusted Gross Income (AGI).  There is no addition to the Federal AGI for Corona Virus related distributions from retirement plans listed in the Hawaii instructions for 2020.  Moreover, I am not aware of any states that have stated they will not recognize Coronavirus -related distributions in gross income at the same time and in the same amounts as they are included in federal gross income. 

[janellemanaois]

I am having the same issue. I have entered "0" in the exclusion amount, but then it adds my entire covid 401k distribution amount on "other Hawaii addition to federal AGI" (line 10 of form n-11). So it is forcing me to pay taxes on the entire distribution and not spread it out over the 3 years like the federal. 

Can someone please clarify.

[AmyC]

Delete your Hawaii return. Update your program. Go back through the Federal 1099R entry.

I added a lump sum distribution and went through HI return with it taxing correctly. No sign of the screen you see. There is a screen, Uncommon Hawaii tax situations, that has an option to choose lump sum distributions. This would not be right for the COVID though. You should not be having to mark any exclusion. It comes from the federal AGI and flows through.

[janellemanaois]

@AmyC  I am unable to delete my Hawaii return and start all over because I already paid and filed my federal return.

Turbo tax is automatically adding the entire covid related withdrawal from my 401k to my income. There is no way for me to delete it.  I can't even change the amount to "0"

[Cynthiad66]

You can file an amended return to correct that issue.  Here is how to amend your return:

In TurboTax, you can amend your state return without filing an amendment for your federal. Select your version for instructions:

TurboTax Online