According to the New York Department of Taxation and Finance:

"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."

To indicate that the 1099-R is not taxable in NY for one of the reasons above, choose the following Pension Type on the 1099 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 1099 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.

FAQs

To find out why the exclusion or subtraction is not producing as expected, review the following items.

• 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 as a beneficiary?

  • On federal screen 1099 enter code 4 in box 7 to indicate the income was received as a beneficiary.

  • Complete the NY > PNSN screen by selecting the Federal Form, entering the appropriate MFC, and the decedent's date of birth. If the decedent would have become 59 1/2, the exclusion will be calculated.

• 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 listed above are still 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 + ?