Alabama does not tax social security nor pension income from certain defined benefit plans which I have. (Yes, I checked the box that they were not taxable in the software.) The majority of income is from multiple 1099-Rs. Small amount from 1099-INT. No W-2. One 1099-R is a Roth conversion. In one section, it asks if that 1099 is an IRA OR a Roth IRA conversion. It has the dollar amount in both boxes for the OR and will not allow me to clear one. That is the only troublesome field I see, but the dollar amount the computation is off is not equal to the Roth conversion amount. Federal computations all appear fine. Just state issues.
Yes, I'm having same issue, just ran updates, no change. It looks like my 2023 Roth Conversion is being double counted towards my state income (Alabama). If I converted 100,000 from a traditional IRA, I realize I count this as income, however, when I click the box that it was converted to a Roth, my State Income increases by 200,000 (effectively double counting my conversion) and taxing the same money twice? Only way I've been able to avoid this is to go to my Alabama Forms, Pen Excl Wks and manually change the number. Am I missing something?
I just printed my 2023 taxes, not expecting anything odd. The 1099-R info on the Alabama RS was 120K Roth conversion and also entered as 240 further right on the same line. Why 240K? Now i am battling between turbo tax and H&R Block. The Fed Tax is within 20 dollars but the Alabama state is off by 5K. The white flags are going up.
Here is what I found out last year...
Yes, when you enter the data on the federal form (1099-R) for a traditional to Roth conversion, it will compute the federal taxes correctly, however, the taxable amount you convert AND the amount you roll-over to a Roth are both imported into the State (Alabama) tax form as reported income, thereby doubling the amount. You need to go to your State Tax section and under menu selection of Income, then Retirement Distributions, it will take you to a screen that says that “Some or All of Your Distribution is Taxable”. Both blocks may be filled in due to you answering the 1099-R questions on your federal return. However, it is a one “OR" the other option, and you need to manually decide which one is more appropriate for your situation. By deleting the value in one of these blocks, your State Income should now be correct.
You should be able to modify your State return this way although I don't think you can access this through the "Easy Step" process. You will have to access the AL portion through the "Forms" icon and then go to the "Pen Excl Wks" under the "AL Forms" pull-down. You should be able to modify this manually from here so your rollover is not being double counted. Good Luck!
Resolved due to my oversite and assistance from a friend. 6K correction, Yeh!
I have been filing Alabama State Taxes since 2003 and have never had State Taxes on my Military Retired pay. Why now??? The State just took $1883 from my checking account as State taxes owed for 2024!!!
Military retirement is deductible in Alabama but you have to go through the retirement income adjustments screen while preparing the Alabama tax return. @Ed Salgado Prepare an amended return for AL 2024 - and subtract your military retirement pay.
Once you answer YES on the 2nd screen below, the income will show as non-taxable on your AL return.