our NYS pensions are being taxed through turbotax for the first time. Why is this happening?

Your pension income is not taxable in New York State when it is paid by: New York State or local government. the federal government, including Social Security benefits. certain public authorities.  In addition, NY allows a $20,000 exemption if you are over the age of 59 ½ or turn 59 ½ during the tax year, you may qualify for a pension and annuity exclusion of up to $20,000.

• See NY Information for retired persons for full details. 

This can be handled in the New York (NY) State portion of the tax return interview. 

1. When you reach the Changes to Federal Income screen >: Scroll to Wages and Retirement Adjustments
2. Select Received retirement income > Start
3. Answer the questions on each screen
4. On the screen titled Governmental Pension Exclusion enter the taxable amount to exclude for the NY return
5. The next screen will show you the Pension Deduction Summary
6. See the image below for assistance.