Solved: Treatment of Pension Income on state return
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al14ers
New Member

Treatment of Pension Income on state return

I'm 59, retired, not disabled  and started receiving about 12K a year from the PBGC.

Is the full amount taxable on my CO state tax return or is any portion excluded? 

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Accepted Solutions
AmyC
Employee Tax Expert

Treatment of Pension Income on state return

Yes, the entire $12,000 is an exclusion for you. It is less than $20,000 which is the limit for your age.

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3 Replies
HelenC12
Employee Tax Expert

Treatment of Pension Income on state return

It's not a yes or no answer. There's other factors when calculating the amount not taxable. The best way to find out is to enter it in TurboTax.

 

  • Retirees can deduct between $20,000 and $24,000 in retirement income from state taxes in Colorado, depending on their age. Taking that deduction into account, income from sources such as Social Security or pensions may be mostly or entirely state-tax-free for many Colorado retirees.

 

Here's how to enter your 1099-R in TurboTax:

  1. Open (continue) return if you don't already have it open.
  2. Inside TurboTax, search for 1099-R and select the Jump to link in the search results.
  3. Answer Yes on the Your 1099-R screen, then select Continue.
    • If you land on the Your 1099-R Entries screen instead, select Add Another 1099-R.
  4. Select how you want to enter your 1099-R (import or type it in yourself) and then follow the instructions. You can add up to 20 1099-Rs.

Source: TurboTax FAQ

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al14ers
New Member

Treatment of Pension Income on state return

Thxs Helen, I have done the steps you described below in entering my 1099-R data on my fed. tax return. 

My question related more to when going through the state return, in the  pension and annuity section TT asks:

"You have 12K of federal taxable pension and annuity income.

Enter the portion that qualifies for the CO pension and annuity exclusion, enter 0 if none.

So, if I understand your pervious answer all 12K of mine would be excluded from state taxes....Correct?

 

 

AmyC
Employee Tax Expert

Treatment of Pension Income on state return

Yes, the entire $12,000 is an exclusion for you. It is less than $20,000 which is the limit for your age.

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**Mark the post that answers your question by clicking on "Mark as Best Answer"

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