As you know, the change to the tax code in Utah was that taxpayers receiving military retirement income receive a nonrefundable tax credit of 4.95% of the distribution reported in income, so the military retirement still appears as taxable income but a credit is applied to compensate for it. See this Utah page.
NOTE: you can't take the military tax credit if you claim either the Social Security Benefits Credit or the Retirement Credit. Please see this Utah page.
TurboTax will identify which of the credits gives you the best result and apply it automatically.
We have identified an issue with the military retirement credit in Utah, and are researching it.
Are you or your spouse also taking the Retirement Credit (code 18)? You cannot claim both. See https://incometax.utah.gov/credits/military-retirement and https://incometax.utah.gov/credits/retirement-credit .
No we are not taking any other credits. Turbo Tax form/software does not have the Utah State Military Credit listed.
As you know, the change to the tax code in Utah was that taxpayers receiving military retirement income receive a nonrefundable tax credit of 4.95% of the distribution reported in income, so the military retirement still appears as taxable income but a credit is applied to compensate for it. See this Utah page.
NOTE: you can't take the military tax credit if you claim either the Social Security Benefits Credit or the Retirement Credit. Please see this Utah page.
TurboTax will identify which of the credits gives you the best result and apply it automatically.
We have identified an issue with the military retirement credit in Utah, and are researching it.
I'm NOT taking any other credits. Turbo Tax did not identify which credits gives me the best results because there is no other credit to apply. The Turbo Tax Utah State form does not allow / list the Military Retirement Credit. When I fill out the form manually (paper) I get an additional $1200.00 over what Turbo Tax gets me.
Should I just fill a paper return for my state taxes?
@Chuck_K Please re-read the latter part of @BillM223 's response: "We have identified an issue with the military retirement credit in Utah, and are researching it." I read that as a bug in TurboTax Utah that Intuit will need to fix before you can move forward with your Utah state return. I suggest you wait a short time for a resolution of that bug; if that doesn't happen, you may want to file the state return on paper.
When will this bug be fixed. I paid for federal and state tax support and do not want to fill out a paper form when I have paid for Utah State tax support.
We’re currently working to resolve this inconvenient issue. Please see this link here for more information.
@Chuck_K
Not sure why this is still an issue. The law was signed last year in January. Intuit had an entire year to update the software.
I too am having the same problem using AJ code. I wonder how we will know when Turbo Tax has this fixed? keep coming back to this post everyday.
My Utah State return was also rejected by the state because TurboTax without any input from the user elected to use Nonrefundable Credit Code AH (Social Security) which is significantly less than Code AJ (Military Retirement). The state system was smart enough to detect the Military Retirement and reject the TurboTax file return because of this error.
The TurboTax error explanation stated it was a known issue with TurboTax affecting the Utah returns and will be addressed in a software update. The software update was scheduled for release on February 3rd which has passed. Since I use an online product how can tell when the online version is updated and is there a new scheduled date for the software update release?
Yes, our team is working on updating the Utah state military retirement credit area. There have been a lot of tax changes and the IRS and the state tax departments are still updating some forms, then TurboTax integrates the changes. This is common early in the filing season. Please see this TurboTax Help Article with a link to sign up to receive updates.
You can go to the Utah State Tax Commission home page and download the TC40 e file packet. Fill in the forms with information from the Turbo tax federal return. You can claim the military retirement credit and efile free of charge. Took about ten minutes. Received confirmation of receipt within 10 minutes by email. Simple
You can go to the Utah State Tax Commission home page and download the TC40 e file packet. Fill in the forms with information from the Turbo tax federal return. You can claim the military retirement credit and efile free of charge. Took about ten minutes. Received confirmation of receipt within 10 minutes by email. Simple
Any updates to whether Turbo Tax has updated the fix for this?
They did fix it. You have to go back to your income and edit your Military Retirement 1099-R. As you re-review your entries you will find a new box asking if this is Military Retirement/Pension. It will be unchecked. Check it and when you complete the edit of your Military retirement 1099-R your State Income Tax Due will change to reflect the adjustment for the AJ Credit. When you review your State Tax Forms you will see the AJ credit in Part 3 of your TC-40A. You can then submit/electronically file your state tax forms and the State of Utah will accept them.
It's unfortunate that TurboTax did not inform everyone that it was fixed.
I don't think the fix is universally adopted. I've reloaded my 1099-R 3 times and have yet to find a "box" which allows me to declare this mil retired pay. Please make this a universal fix across all versions of TurboTax and make this more intuitive. As it is, I will NOT use Turbo Tax to file my Utah taxes since it does not allow the SB 11 Tax credit. Truly disappointing.
That's unfortunate and I understand your frustration. I can't get back to my 1099R since I've filed and it was accepted to tell you where to look for the box. I know I was plenty frustrated when they released the state version with a known bug. Utah State rejecting my electronic filing the first time I tried to efile saved me lot's of money and the need to file an amended return.
Are you filing a resident return for Utah? The box that rclayton22 is referring to will appear only for a resident of Utah.
Are you using an Online product or a product on Windows or on a Mac?
After you deleted and re-entered the 1099-R for your military pension, did you not see this screen (NOTE: you must finish the 1099-R interview, don't jump away immediately).
@CGUTAH
Turbotax Utah state tax program is a waste of time. There are may exemptions and deductions that are available to filers, but Turbotax completely ignores them. I had to go to the state tax commission online to get information on the allowed deductions and instructions on their implementation (Forms, etc.)
I was able to find two deductions that lowered the taxes due.
Next year I may have to go elsewhere for complete tax advice.
This is still an issue with TurboTax two years later. Try putting the code AJ into the TC-40A, Part 3 portion of your return as per UC §59-10-1043 and it will be rejected as an invalid code. This tax code went on the books January 2023 and TurboTax still hasn't caught up.
No. There doesn't seem to be any issues with the Turbo Tax program. I have tested the program and it seems to be working properly. Follow these steps.
Re: FORM TC-40A: Part 3 Credit Code AJ still not recognized by TurboTax (Utah Military Retirement...
It depends. I have tested this in Turbo Tax and it is working normally with no errors at the end of the return. Possibly, you may be entering the information on your own so here is how to enter your 1099R in your federal return so that the information will flow to your FORM TC-40A.
Start TurboTax:
Now after entering your 1099R that reports your military income, there will be some follow-up questions. When you reach a screen that is labeled "Where is the Distribution From", indicate it is military pay. This will then flow to your Utah Form TC-40A with . You do not need to do anything additionally. Here is how the screen(s) should appear in your return.
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