How can i get TT to fill in schedule 1 of michigan forms to get proper deduction as surviving spouse of someone born before 1946?

[cjratkows]

This is for full pension and retirement account deduction allowed of 53759 rather than 20000 standard

[ErnieS0]

To adjust the pension exclusion for someone born before 1946

• In Michigan, go to Retirement Income and Pension Summary
• Click Edit next to the pension
• On Retirement and Pension Benefits, check the box Check if distribution is from a spouse who died before 2020 and was born before 1953
• Fill in the information about the deceased spouse

If you are a surviving spouse who was born after 1945 and has reached the age of 67, has not remarried, and claimed a subtraction for retirement and pension benefits on a return jointly filed with the decedent in the year they died, you may elect to claim the larger of either:

• Your Michigan Standard Deduction or
• The retirement and pension benefits subtraction based on the older deceased spouse's year of birth subject to the limits available for a single filer.

[cjratkows]

But the pension and retirement benefits distribution were NOT "from a spouse who died before 2020 and was born before 1953". 

However, the second part of your reply DOES apply, I.E. 

"If you are a surviving spouse who was born after 1945 and has reached the age of 67, has not remarried, and claimed a subtraction for retirement and pension benefits on a return jointly filed with the decedent in the year they died, you may elect to claim the larger of either:

• Your Michigan Standard Deduction or
• The retirement and pension benefits subtraction based on the older deceased spouse's year of birth subject to the limits available for a single filer.

And I cannot get TT to allow a subtraction amount based on my older deceased spouse. She was born in 1942, passed in 2015 for which tax year I filed a married filing jointly return and used the retirement and pension benefit based on her age.

TT does not ask questions to cover that  qualification, and I can't ascribe the pension and benefits I'm receiving to a deceased spouse since they are, and always have been mine.

If I DO check the box, fill in the info, THEN what? How do I correct the mis-information on the form?

[cjratkows]

Thanks for your help, but I think I figured it out on my own without any anomalies on the actual forms I will file.

(I'll preface my solution by saying that I think TT is broken in step by step by not interrogating for this condition where an unremarried spouse of a deceased person born before 1945 can use his deceased spouse's birth year for deduction, even if NOT receiving any deceased spousal benefits.)

If I "go to forms" and open the Pension wks, then quick zoom to form 4884 (at the bottom of the pension wks)

form 4884 opens.

On Form 4884, I fill in the smart worksheet insert for "tier 2 and tier 3 surviving spouses" and check the box to "use the deceased spouse's year of birth and compare deduction amounts", then check the box for line 7d, which fully explains the situation.

All the correct amounts fill in, and the correct deduction is calculated and filled in on schedule 1. All the forms do not have any misleading information, such as a deceased column check marked, or line 7a,b,c filled in, since I am NOT receiving any benefits from a deceased spouse.

This procedure results in error free forms for filing being printed. The return review process DOES hiccup, flagging the areas with the checkbox and pointing out that they are only to be used for the exact situation I have.

Thanks,

CHris

[AmyC]

The desktop version is much better for some situations. Sounds great!

[dbaumga1]

You have precisely described my situation.  My deceased spouse's pension had no survivorship option and, therefore, ended upon her death ... I do not receive a survivor benefit from her pension.  Prior to her death, we always filed jointly and enjoyed the larger pension subtraction associated with her age.  The Michigan 2021 Form 4884 instructions state:  "Lines 7a through 7c: If you are receiving retirement and
pension benefits from a deceased spouse OR are claiming the retirement and pension benefits subtraction based on your deceased spouse’s year of birth, enter your deceased spouse’s
name, Social Security number and year of birth."  This indicates that electing to continue using my deceased spouse's date of birth is available even though I no longer receive any retirement/pension benefits from her.  How to properly elect this option is still a bit of a mystery to me and is not properly addressed in the TT online software.  It is hard for me to believe that just because I no longer receive $1 from her pension, I lose a $34,404 additional deduction (2021 ed. 54,404 vs 20,000) ... we're talking serious money here!  And, now that I have been made better aware of this topic, I believe I will need to file some amended returns for previous years ... TT has not lived up to my expectations!

[cjratkows]

I have used this method for many years.

The IRS of Michigan didn't like it last year (tax year 2020), and it was an extra hassle to copy their own booklet pages and send in supporting documents (although they must have prior year returns, and I did send some supporting documents with my tax forms) but in the end they allowed the deduction. As you point out, it's a hefty chunk, and worth the effort.

Chris

[chriski]

Update for tax year 2021 (this is still cjratkows):

Once again I have tried to take the pension deduction based on deceased spouse's birthyear, and once again I had to find a workaround.

The interview process DOES NOT WORK correctly! Looks like it wants that you put in you are receiving a deceased spouse's benefits. But this is not the case.

Had to again go into the Pension Wks, zoom to form 4884 and check appropriate boxes for deduction based on deceased spouse's birthday. The correct deduction amount is computed. Returning to the step by step results in another screen showing up that indicates there are two amounts and I can choose the one based on deceased spouse's birthdate. 

So SOME part of TT knows about it, but it's not fully fleshed out and interview questions are not asked for the situation. 

There is also a red exclamation point showing in the forms sections, so I'm guessing there may be an error showing up. But I file paper forms anyway.

It's a bit different than last year, but still not fixed!

Chris