NY $20K Pension/Annuity Income Exclusion: TurboTax is Showing $40K Exclusion

[Inugasuki]

NY Form IT 203 Line 28 is showing $40K exclusion even though I am not 59½; only my husband was.  He died this summer and I left NY this fall.  I am filing a joint/part-year NY return.  I did receive a distribution as his beneficiary, but he is claiming $20K so I don't think I qualify.

[Cynthiad66]

Correct.  The exclusion is based on his entitlements and you are only allowed one exclusion of up to $20,000.

As a beneficiary of a pension, the exclusion is based on the decedent’s entitlement, subject to the decedent’s age and amount limitations. However, if the recipient elects to transfer or roll it over into their own name, it now becomes subject to the recipient’s age (59½) and amount ($20,000) limitations. Note: If there is more than one beneficiary, the exclusion is prorated to the same percentage share as the distribution.

Use this link for additional information.

[Inugasuki]

Thank you!

It seems that TurboTax is incorrectly allowing me the $20K exclusion.  How can I fix it?  Why doesn't TurboTax know that I am not entitled since I am not 59½ and the decedent is my husband, who is taking the $20K exclusion?  Is this a glitch??

[LindaS5247]

If you receive your own pension income and your deceased spouse’s pension income, you are entitled to a maximum pension and annuity exclusion of $20,000 each year.

You would be entitled to an exclusion of $20,000 for his pension.

If you receive pension and annuity income of a deceased individual, you may take this subtraction (to the extent the distributions are included in your federal adjusted gross income), regardless of your age, if the deceased would have been entitled to it had the deceased continued to live. 

Click here for additional  information regarding the New York pension exclusion, under Pension and Annuity income exclusion, page 14, under "If you receive pension and annuity income of a deceased individual".

If TurboTax is giving you $40,000 as an exclusion I would check your Form 1099-R entries.  You could try deleting and reentering your Form 1099-R.  Sometimes this helps.  You could also try deleting and restarting your New York return.

You can do this as follows:

1. Sign in and open a section of your return
2. From the menu, select State and then select Continue on the Let's get your state taxes done right screen
3. On the Status of your state returns screen, select Delete next to your state, then answer Yes

[Inugasuki]

Thank you！

I checked the 1099-R entry and  went through the NY return again, but it's still giving me the $40K exclusion for the federal column, instead of $20K.  When I look at NY Pension/Annuities/IRA Worksheet, is it correct that my deceased husband column is showing $20K for Line 4a and another $20K for Line 4b?  Perhaps, it's because I am filing a part-year/nonresident return: $20K for NY resident period and another $20K for NY nonresident period???  How can I check whether the incorrect $20K belongs to me or my deceased husband?

[AmyC]

There are 2 different issues at work here. You get the beneficiary deduction while your spouse gets the pension exclusion.

• The NY pension exclusion of $20k for which your husband qualifies. 
• The second issue is the beneficiary rule. NY is kind when death is involved. NY states: If you received pension and annuity income as the beneficiary of a deceased officer or employee of the United States, New York State, or local government within New York State, you may also make this subtraction to the extent that the distributions are included in your federal adjusted gross income.

[Inugasuki]

Thank you!

I didn't receive pension and annuity income as the beneficiary of a deceased officer or employee of the United States, New York State, or local government within New York State.  I received the distribution from his IRA and survivor benefit from another state.

[AmyC]

In that case, you do not qualify for the additional $20,000 and it should not be there. I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the  directions below:

TurboTax Online:

Sign into your online account.

Locate the Tax Tools on the left-hand side of the screen. 

A drop-down will appear. Select Tools  

On the pop-up screen, click on “Share my file with agent.”

This will generate a message that a diagnostic file gets sanitized and transmitted to us.

Please provide the Token Number that was generated in the response.

TurboTax Desktop/Download Versions:

Open your return.

Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent”

This will generate a message that a diagnostic copy will be created.  Click on OK and the tax file will be sanitized and transmitted to us.

Please provide the Token Number that was generated in the response.  

[Inugasuki]

I sent the file.  How do I provide you with the token number?

[AliciaP1]

You need to post the token number here in the thread and we will pick it up and take a look for you.

@Inugasuki 

[Inugasuki]

1085429

[EdithM]

In the NY interview for 1099-R amounts there is a question "Were You a Beneficiary?".  This question is applicable to receiving a distribution from someone filing a different return, a decedent other than the taxpayer or spouse.  In this case this question should be answered "No".  Any information entered on the following screen will be removed, the amount on the return will calculate as it should.