Iowa Pension/Retirement Income Exclusion Worksheet

[wilsone52]

Iowa Pension/Retirement Income Exclusion Worksheet looks correct, but Iowa schedule 1, Line 7 is blank.

Turbotax Premier online

[LeticiaF1]

Per the Iowa Retirement Income Tax Guidance, to take this exclusion, the pensioner or retirement income recipient must meet one of the following conditions:

a. 55 years of age or older on December 31, 2024
b. Disabled, or
c. A surviving spouse or a survivor having an insurable interest in an individual who's qualified for the exclusion in 2024 based on age or disability. A survivor other than the surviving spouse is considered to have an "insurable interest" if the survivor is a son, daughter, mother, or father of the annuitant or pensioner.
d. For tax years beginning on or after January 1, 2024 a surviving spouse may exclude amounts received from a deceased spouse's pension. Regardless if the deceased spouse was 55 years of age or older or disabled if the pension was from employment in a protection occupation, or as a sheriff, deputy sheriff, firefighter, or police.

Only enter amounts here that should be excluded from the Iowa income tax return. You only need to make an entry here if your retirement income is taxable to a different state other than Iowa or you meet the exception outlined in "d" above.  Also, pensions received from DFAS that represent military retirement pay will appear in this field. These are excluded on a separate line of IA 1040, Schedule 1.

In TurboTax, go back to your Iowa interview, look at your entries. The question you need is right after Other State Adjustments to Federal Income. In the Iowa Retirement income, you can enter the amount that should not be taxed by Iowa.  See the images below for your reference:

[wilsone52]

The interview page was correctly filled out, but apparently resulted in negative income. So, Turbotax denied all retirement income exclusions without comment.  I changed the exclusions so there was still positive income, and those exclusions were accepted. I think Turbotax should have a response in the program other than not accepting any exclusions.