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April 7, 2024
Question

Maryland State Retirement Pickup

  • April 7, 2024
  • 1 reply
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On my Maryland state return Turbotax is adding $217,746 for State Retirement Pickup. My AGI on my federal return is $653k so this is a huge addition that doesn't seem right. How can I fix it? Thank You. 

    1 reply

    April 7, 2024

    The pickup amount is generated from what you've input from your Form W-2(s).  The only way to "fix" your pickup contribution is to alter the W-2(s) with the contribution that you input into TurboTax, which you should not do.  If you're entitled to a refund on your state tax return, the processing of your return can be delayed or adjusted if you fail to include the state pickup amount.

     

    The pickup contribution is reflected as "STPICKUP" or something similar in box 14 of your Form W-2.  It populates line 3, State retirement pickup, on Form 502 when you input your W-2 information. 

     

    The contribution isn't subject to federal tax, but is subject to Maryland state and local tax, and is therefore included as an addition to Maryland income.

     

    Generally speaking, you automatically populate 502SU, Maryland Subtractions from Income, if it's relevant to you, as you enter information into TurboTax, both in the federal portion of the TurboTax program and Maryland state interview portion of the program.

     

    According to the Form 502 instructions, you can claim, as a subtraction, the:

    Amount of pickup contribution shown on Form 1099R from the state retirement or pension systems included in federal adjusted gross income. The subtraction is limited to the amount of pickup contribution or the taxable pension, whichever is less. Any amount not allowed to be claimed on the current year return may be carried forward to the next year until the full amount of the State pickup contribution has been claimed.

    You can claim a Pickup Contribution Subtraction only if it applies to you.  Select Start to the right of Pickup Contribution Subtraction when you come to the Here's the income that Maryland handles differently page of the Maryland interview, and you'll be able to make any appropriate adjustment.