NJ Pension Exclusion

Forum|Forum|4 years ago
April 6, 2022
2 replies
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I did a complete manual review of my NJ taxes and it appears that there is an error in the TurboTax software regarding Pension Exclusion. Yes, the software does properly calculate the pension exclusion BUT it does NOT enter the amount of the exclusion on Line 28A. Therefore the tax calculation results in too large of a taxable amount if you are entitled to the exclusion. Is someone from TurboTax reading this and how do I get it corrected?

Best answer by rjs

The exclusion amount shows in the box on the left under the word Taxpayer but not in the Line 28A blank in the column on the right. I am using the CD version and update every time that I log in.

Make sure you don't have an override on line 28a. If the line is blank, there is nothing in the display to show that there's an override. People occasionally create an override accidentally by pressing Ctrl-D without realizing it.

I didn't ask you whether you are using Windows or a Mac. In Windows, in forms mode, right click on the space for the amount on line 28a. If one of the choices in the menu that pops up is "Cancel Override," click on that to remove the override. (If the menu option is just "Override," then there is no override.) Another way to tell if there's an override is to type an amount on the line. If the numbers that you type appear in red, there's an override. If there is no override, you won't be able to type an amount on the line. It should be similar if you're on a Mac, but sometimes there are differences in the user interface, and I'm not familiar with it.

JohnW152

Level 15

There are no known issues with this exclusion, so let’s make sure that you actually qualify.

There are two requirements to exclude all or part of the pension income that you reported on line 20a of your 2021 New Jersey Resident Return, Form NJ-1040:

You (and/or your spouse if you’re filing jointly) were age 62 or older, or blind/disabled as defined by Social Security guidelines, on the last day of the tax year; and
Your income on line 27 of Form NJ-1040 is $150,000 or less, with a full-year income requirement for part-year residents.

When only one spouse is 62 or older or disabled, you’re only allowed to enter only the pension income of that spouse. You can’t exclude the pension income of the spouse who’s younger than 62 and not disabled.

Please see Line 28a – Pension/Retirement Exclusion in the 2021 Instructions for the NJ-1040 for more information.

If you meet the guidelines for the exclusion, please reply back.

KSpoke

Level 2

Both my wife & I were over 62 at the end of 2021 and our income was less than $150,000. In completing NJ Tax Worksheet D manually, I calculated an exclusion of $6,000 less than TurboTax. It appears that TurboTax included a $6,000 Special Exclusion for joint filers who will never receive Social Security or Railroad Retirement benefits on top of the exclusion amount. Also, the NJ Tax Department disagreed with TurboTax's calculation and brought the total exclusion down to only $6,000. Has anyone else experienced this?

fanfare

Level 15

@KSpoke

TurboTax is buggy and getting worse not better.

Jim from NJAuthor

Level 2

Thank you all for your help. Problem solved. There was an OVER-RIDE on Line 28A. I have no idea how it got there but there it was. You all got me an additional $1,000 refund!