I have railroad unemployment. It is not supposed t...
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wescoebert
New Member

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

 
14 Replies
npierson7
Level 1

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

You don't need to manually adjust your income for your state. If your state doesn't tax  unemployment benefits, the amount won't be part of your taxable state income. 

wescoebert
New Member

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

My state does tax unemployment generally, but railroad unemployment is exempt from state taxes and I can’t seem to find a way around this on turbo tax. Someone helped me with it a few years ago, but I don’t remember how

SamS1
Expert Alumni

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

Which state do you live in?  You should be able to make an income adjustment on your state return removing the unemployment benefits.  There also may be a question regarding the nature of the unemployment benefits on your state return.  Could you provide your state of residency so we can check further?  

 

The pandemic has affected your taxes in many ways. Including reporting in TurboTax the amount of stimulus money you received. Click Here for more information on how the Pandemic affected your 2020  taxes.

wescoebert
New Member

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

Kansas is the state, but I’m not sure how to adjust my state income through turbo tax. I’ll have to look at it again and see if there is a way

AmyC
Employee Tax Expert

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

Correct, the income is KS exempt. Tax Withholding and Railroad Retirement Payments | RRB.Gov

 

There is only a workaround available for your situation. Here's how:

  1. Return to the state.
  2. Edit, continue through until you see
  3. Here's the income the KS handles differently
  4. Scroll to the bottom: Income that KS doesn't tax
  5. Start
  6. The closest match would be KPERS lump sum distribution. 
  7. Continue
  8. Here's the income that KS handles differently
  9. Income that KS doesn't tax, you see the amount you entered
  10. Done with Income

Now you are thinking, I don't want to enter this is as KPERS or any of those. Well, the goal is to get it taken off of your income as it should be. Your tax liability will be correct. If you get a letter from the state someday asking, simply reply that it was actually Railroad Unemployment which is non-taxable. The state will be happy. Usually, the state will realize the deduction matches that income amount.

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Sauceman89
New Member

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

Hello, I am in the same situation. Would it be a good idea to file both fed and state without claiming the RR Unemployment then amending the federal?

SamS1
Expert Alumni

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

That would be another work around but you would need to file the amended return by 4/15 and pay any associated tax prior to 4/15.  Before you do that, check to see if on the state return you can make the adjustment manually.

Moveon2k
Level 2

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

I'm in NY and having the same problem.  Can you please tell me the workaround to take the income off the state for NY?

wescoebert
New Member

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

As far as I know the only way is to fill out a paper state form and just put the right amount of taxable income in... there should be a way to adjust income but I never found out how on turbo tax... 

Moveon2k
Level 2

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

Thank you for your reply.  I'm really hoping someone from TurboTax gives me the answer I need so that I won't have to fill out paper forms.  Last year AARP did it electronically for me, so I know there has to be a way.  I'm glad we have that extension so I have more time to figure it out.

AmyC
Employee Tax Expert

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

@wescoebert I posted the answer to your issue earlier in the thread. I am so sorry, I did not realize I failed to tag you. Please look up for your answer.

 

@Moveon2k you can choose to remove it several places on the NY return, none of them perfect. However, the state should match the amounts and realize. If not, they will send a letter and you send it back with a copy of your form.

  1. You can select Changes to Federal Income. 
  2. You can choose from there, reasonable would be Other Changes,
  3. Enter, continue past additions,
  4. any other Subtractions?
  5. Enter your RR $ in Special Accruals
  6. The return will show other changes and the subtraction.

 

The goal is to have your taxable income correct. The states are not entitled to tax the RR unemployment.

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Moveon2k
Level 2

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

I'm sorry, but I don't understand these directions.  Shouldn't I be taking them off NYS not putting them in differently in Federal?  Plus I don't understand the directions.  I'm sorry.  Please help.

DMarkM1
Employee Tax Expert

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

Yes @Moveon2k you are correct.  This is all done in the NY state interview. 

  1. Click "State" in the left hand menu
  2. "Continue" NY
  3. "Continue"
  4. Scroll down to "Changes to Federal Income"
  5. "Update" the "Adjustments to Federal Income"
  6. "Continue" to the page titled "Changes to Federal Income"
  7. Scroll down to the "Other NY Adjustments" section
  8. Find the "Other changes to federal income" topic
  9. "Start"
  10. "Continue" to the "Subtractions" page
  11. In the NY box for "Special Accruals" line enter the RR UI amount from your form
  12. "Continue"

 

 

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jgrundeen
New Member

I have railroad unemployment. It is not supposed to be taxed by state. Yet I don’t know how to remove it from my state incom. Anyone know the remedy for this?

I'm having this same issue with the state of MN.  Form M1 automatically adds back the 10,200 of exempt unemployment from the federal form.  I am then allowed to do a subtraction of the railroad unemployment amount on M1M.  However form M1W reporting taxes withheld is requiring the 1099 amount of income to be entered to get the subtraction.  I tried to enter and note $0 MN withheld, but it is requiring a MN Tax ID which the 1099 form does not note.  It is not allowing me to continue with my e-file due to no MN Tax ID for the railroad unemployment benefit.

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