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15794: NY - Pension Exclusion


New York

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:

  1. Is the taxpayer's (and spouse if present) date of birth on federal screen entered?
    • The exclusion only calculates automatically if the person receiving the payment is age 60 or older.
  2. 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.
  3. 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.
  4. Was the annuity or pension received by a beneficiary?
    • On federal screen 1099R enter code in box 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.
  5. Is the IRA or Pension income entered on federal screen 3?
    1. Federal screen 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.
  6. Is there a disability income exclusion on form IT-221?
    1. 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 + ?

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