I have entered New York State Pensions, why is the subtraction is not showing on the NY form?
According to the New York Department of Taxation and Finance article:
"Your pension income is not taxable in New York State when it is paid by:
- New York State or local government
- the federal government, including Social Security benefits
- certain public authorities
In addition, income from pension plans described in section 114 of Title 4 of the U.S. code received while you are a nonresident of New York State is not taxable to New York."
(For the full article see "Information for retired persons")
To indicate that the 1099-R is not taxable in NY for one of the reasons above, choose the following Pension Type on the 99R screen, as applicable:
- State Government: S (State drop list must be NY)
- City Government: Z (State drop list must be NY)
- US Government: G
- Military: M
When one of these types is chosen on the 99R screen for an eligible taxpayer, on the NY 201.PG2, the pension amount will flow to line 10 and then a subtraction will be carried to line 26. If the 1099-R is marked as an IRA/SEP/Simple, the subtraction is limited to $20,000 and flows to line 29 instead.
To find out why the subtraction is not producing as expected, review the following:
- Is the taxpayer's (and spouse if present) date of birth on federal screen 1 entered?
- The exclusion only calculates automatically if the person receiving the payment is age 60 or older.
- Is there IRA or Pension Income (lines 9 & 10) on the return?
- The exclusion on line 29 is limited to the lesser of IRA/pension income or $20,000 for the taxpayer and again for the spouse.
- If there is no taxable IRA or Pension income on the return, there is no exclusion.
- Did the taxpayer or spouse turn 59-1/2 this year?
- Enter the amount of taxable IRA and Pension income received after the taxpayer (and/or spouse) turned 59-1/2 in the Override field on NY screen 2.
- Was the annuity or pension received by a beneficiary?
- On federal screen 1099R enter code 4 in box 7 to indicate the income was received as a beneficiary. Enter the decedent's age at the bottom of screen 1099R to indicate whether they would have qualified for the exclusion had they lived.
- Is the IRA or Pension income entered on federal screen 3?
- Federal screen 3 must have a state code of NY. You will need to enter the amounts to exclude in the override field on NY screen 2. The age and income limitations in 1 and 2 above will still be applied.
- Is there a disability income exclusion on form IT-221?
- The sum of the pension exclusion and the disability income exclusion claimed is limited to $20,000 for the taxpayer and $20,000 for the spouse.
Additional information can be found within New York data entry:
- Screen FAQ
- Topic G - Pensions, securities, RRB
- Topic R - Why is the pension exclusion not calculating for this return
- Screen PNSN
- Access Screen Help by pressing CTRL + ALT + ?